SEC Filing | Trip.com Group Limited

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CTRIP.COM INTERNATIONAL, LTD.

As filed with the Securities and Exchange Commission on November 25, 2003

Registration No. 333-110455

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1 TO

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

CTRIP.COM INTERNATIONAL, LTD.

(Exact name of registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)


Cayman Islands (State or other jurisdiction of incorporation or organization)		7389 (Primary Standard Industrial Classification Code Number)		Not Applicable (I.R.S. Employer Identification Number)

3F, Building 63-64

No. 421 Hong Cao Road

Shanghai 200233, People’s Republic of China

(8621) 3406-4880

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

CT Corporation System

111 Eighth Avenue

New York, New York 10011

(212) 664-1666

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:


David T. Zhang, Esq. John A. Otoshi, Esq. Latham & Watkins LLP 20th Floor, Standard Chartered Bank Building 4 Des Voeux Road Central, Hong Kong S.A.R., China (852) 2522-7886		Chris K. H. Lin, Esq. Simpson Thacher & Bartlett LLP 7th Floor, Asia Pacific Finance Tower 3 Garden Road Central, Hong Kong S.A.R., China (852) 2514-7600

Approximate date of commencement of proposed sale to the public:

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

CALCULATION OF REGISTRATION FEE






		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering Price Per	Aggregate Offering	Amount of
Securities to be Registered	Registered(1)(2)	Ordinary Share(1)	Price(1)	Registration Fee


Ordinary Shares, par value US$0.01 per share(3)	9,400,000	$8.00	$75,200,000	$6,084(4)


(1)	Estimated solely for the purpose of determining the amount of the registration fee in accordance with Rule 457 under the Securities Act of 1933.

(2)	Includes ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public.


(3)	American depositary shares issuable upon deposit of the ordinary shares registered hereby have been registered under a separate registration statement on Form F-6. Each American depositary share represents two ordinary shares.



(4)	Registrant paid the registration fee in full on November 12, 2003.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion

Preliminary Prospectus dated November 25, 2003

PROSPECTUS

4,200,000 American Depositary Shares

(CTRIP LOGO)

Ctrip.com International, Ltd.

Representing 8,400,000 Ordinary Shares

This is Ctrip’s initial public offering. Ctrip is offering 2,700,000 American Depositary Shares, or ADSs, and the selling shareholders included in this prospectus are offering an additional 1,500,000 ADSs. Each ADS represents two ordinary shares. We and the selling shareholders are offering 2,100,000 ADSs in the U.S. and 2,100,000 ADSs outside the U.S.

We expect the public offering price to be between US$14.0 and US$16.0 per ADS. Currently, no public market exists for the ADSs or our ordinary shares. After pricing of the offering, we expect that the ADSs will be quoted on the Nasdaq National Market under the symbol “CTRP.”

Investing in the ADSs involves risks that are described in the “Risk Factors” section beginning on page 11 of this prospectus.


	Per ADS	Total

Public offering price	US$	US$
Underwriting discount	US$	US$
Proceeds, before expenses, to Ctrip	US$	US$
Proceeds, before expenses, to the selling shareholders	US$	US$

The U.S. underwriters may also purchase up to an additional 250,000 ADSs from the selling shareholders at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover overallotments. The international managers may similarly purchase up to an additional 250,000 ADSs from the selling shareholders.

Neither the Securities and Exchange Commission nor any state securities regulators has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The ADSs will be ready for delivery on or about , 2003.

Merrill Lynch & Co.


U.S. Bancorp Piper Jaffray	SoundView Technology Group

The date of this prospectus is , 2003.

TABLE OF CONTENTS


	Page

Prospectus Summary		1
Risk Factors		11
Special Note Regarding Forward-Looking Statements		25
Use of Proceeds		26
Dividend Policy		27
Capitalization		28
Dilution		29
Exchange Rate Information		30
Enforceability of Civil Liabilities		31
Selected Consolidated Financial Data		33
Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Business		53
Chinese Government Regulations		67
Management		70
Principal and Selling Shareholders		76
Related Party Transactions		80
Description of Share Capital		85
Description of American Depositary Shares		90
Shares Eligible for Future Sale		97
Taxation		99
Underwriting		104
Legal Matters		108
Experts		108
Where You Can Find Additional Information		108
Index to Consolidated Financial Statements		F-1

You should rely only on the information contained in this prospectus. Neither we nor the selling shareholders nor the underwriters have authorized any person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither we nor the selling shareholders nor the underwriters are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

Unless otherwise indicated, (1) the terms “we,” “us,” “our company,” “our” and “Ctrip” refer to Ctrip.com International, Ltd., its predecessor entities and subsidiaries, and, in the context of describing our operations, also include our affiliated Chinese entities, (2) “shares” and “ordinary shares” refer to our ordinary shares, “preferred shares” refers to our convertible preferred shares, “ADSs” refers to our American depositary shares, each of which represents two ordinary shares, and “ADRs” refers to the American depositary receipts which evidence our ADSs, (3) “China” refers to the People’s Republic of China, excluding Taiwan, Hong Kong and Macau, and (4) all references to “RMB” are to the legal currency of China and all references to “U.S. dollars,” “dollars” and “US$” are to the legal currency of the United States. Information in this prospectus assumes that the underwriters do not exercise their overallotment options to purchase up to 500,000 additional ADSs. All numbers discussed in this prospectus are approximated to the closest round number.

PROSPECTUS SUMMARY

This summary highlights key aspects of the information contained elsewhere in this prospectus. Because it is a summary, it does not contain all of the information that you should consider before making an investment decision. You should read the entire prospectus carefully, including the “Risk Factors” section and the financial statements and the accompanying notes to those statements. The statistics relating to the Chinese travel industry and economy included in this prospectus are derived from various government and institute research publications. We have not independently verified such information and you should not unduly rely upon it.

Ctrip.com International, Ltd.

Our Company

We are a leading consolidator of hotel accommodations and airline tickets in China. We aggregate information on hotels and flights and enable our customers to make informed and cost-effective hotel and flight bookings. Since commencing operations in 1999, we have become one of the best-known travel brands in China. We pioneered the development of a reservation and fulfillment infrastructure that enables our customers to:


	•	choose and reserve hotel rooms in cities throughout China and selected cities abroad;

	•	book and purchase airline tickets for domestic and international flights originating from China; and

	•	choose and reserve packaged tours that include transportation, accommodation, and sometimes guided tours as well.

We target our services primarily at business and leisure travelers in China who do not travel in groups. This type of travelers, who are referred to in the travel industry as FITs and whom we refer to as independent travelers in this prospectus, form a traditionally under-served yet fast-growing segment of the China travel market. We act as agent in substantially all of our transactions and generally do not take any inventory risks with respect to the hotel rooms and airline tickets booked through us. We derive our hotel reservation, air-ticketing and packaged-tour revenues through commissions from our travel suppliers, primarily based on the transaction value of the rooms, airline tickets and packaged-tour products, respectively, booked through our services.

For the nine months ended September 30, 2003, we derived 85.8% of our revenues from the hotel reservation business and 10.5% of our revenues from our air-ticketing business. Our packaged-tour business contributed 1.6% of our revenues for the nine months ended September 30, 2003.

We believe that we are the largest consolidator of hotel accommodations in China in terms of the number of room nights booked. In October 2003, we booked approximately 300,000 hotel room nights. As of October 31, 2003, we had secured room supply relationships with over 1,700 hotels in China and over 450 hotels abroad, which cover a broad range in terms of price and geographical location. The quality and depth of our hotel supplier network enable us to offer our customers a wide selection of hotel accommodations, often at significant discounts to published rates. We believe our ability to offer reservations at highly rated hotels is particularly appealing to our customers. Revenues from our bookings for three-, four- and five-star hotels comprised approximately 95.0% of our revenues from our hotel reservation business for the nine months ended September 30, 2003.

We believe that we are also one of the leading consolidators of airline tickets in Beijing and Shanghai in terms of the number of airline tickets booked and sold. We sold approximately 70,000 tickets nationwide in October 2003. Our airline ticket suppliers include all major Chinese airlines and many international airlines that operate flights originating from China. We also believe we are the only airline ticket consolidator in China with a centralized reservation system and ticket fulfilment infrastructure covering all of the economically prosperous regions of China. Our customers can make flight reservations on their chosen routes and arrange

ticket payment and delivery through our ticketing offices and third-party agencies located in over 25 major cities in China.

We offer our services to customers through an advanced transaction and service platform consisting of our centralized toll-free, 24-hour customer service center and bilingual websites. For the nine months ended September 30, 2003, transactions effected through our customer service center accounted for approximately 70% of our transaction volume, while our websites accounted for the balance.

We have experienced significant growth since our inception in June 1999. Beginning in the first half of 2002, we have achieved and maintained positive net income. Our revenues have increased from RMB6.9 million in 2000 to RMB105.3 million (US$12.7 million) in 2002. For the nine months ended September 30, 2003, we generated revenues of RMB111.3 million (US$13.4 million) and net income of RMB29.2 million (US$3.5 million) despite the outbreak of the Severe Acute Respiratory Syndrome, or SARS, during the second quarter of 2003.

Our Opportunity

The Chinese travel industry is large and growing rapidly. The following chart contains certain data from CEIC Data Company Limited concerning the Chinese economy and the travel industry during the period from 1998 through 2002.


					Number of		Number of
	Nominal Gross		Expenditure on		3-, 4- and 5-Star		Civil Aviation
	Domestic Product		Tourism		Hotels in Operation		Passenger Kilometers

	(in billions of RMB)		(in millions of RMB)				(in billions)
1998		7,835		239,118		1,325		80,024
1999		8,207		283,192		1,573		85,728
2000		8,947		317,554		2,368		97,054
2001		9,731		352,237		2,857		109,135
2002		10,479		387,836		3,656		126,870

China’s gross domestic product grew at a compound annual growth rate of 7.5% from 1998 to 2002. The aggregate expenditure on tourism in China increased at a compound annual growth rate of 12.8% during this period. According to China’s tenth five-year plan, the Chinese government expects an approximately 7% compound annual growth rate of China’s gross domestic product from 2000 to 2005. We anticipate that demand for travel services in China will continue to increase substantially in the foreseeable future as the Chinese economy continues to grow.

Even as the rapid growth of the Chinese economy in the past decade has led to a significant increase in the demand for travel services, the travel intermediary businesses are highly fragmented in China, and travel agencies often focus on tour groups. Thus, independent travelers have limited access to discounted rates or comprehensive information on hotels and flights.

Travel consolidators like us are able to offer information aggregated from various hotels and airlines to independent travelers, enabling them to make informed and cost-effective hotel and flight bookings through customer service centers or websites. Call centers or customer service centers allow travelers to gather and evaluate travel information, receive recommendations from customer service representatives and book transactions more efficiently by contacting customer service centers any time, day or night. Competitive labor costs in China have allowed customer service centers to become a cost-effective transaction tool in China. Furthermore, we believe that the travel industry, which inherently involves broadly dispersed travelers as well as a wide selection of travel suppliers in terms of location and price, is also well-suited to benefit from the increasing Internet and online commerce adoption in China, as the Internet’s broadly distributed and easily accessible environment creates the ideal foundation for new marketplaces.

Our Strengths and Challenges

We bridge the gap between independent travelers and travel suppliers. Through our transaction and service platform consisting of our centralized toll-free, 24-hour customer service center and bilingual websites, we serve primarily the traditionally under-served yet growing independent travelers segment in China by helping these travelers plan and book their trips while helping travel suppliers such as hotels and airlines improve the efficiency of their marketing and distribution channel. We have achieved a leading position, in part, by establishing the following competitive strengths:


	•	a leading travel brand in China;

	•	large supplier network and nationwide coverage;

	•	scalable platform and flexible cost structure;

	•	excellent customer service;

	•	advanced infrastructure and technology; and

	•	experienced management team.

We expect to face challenges in our business operations, including:


	•	our limited operating experience as a travel consolidator;

	•	the risk of declines or disruptions in the travel industry;

	•	the risk of recurrence of SARS;

	•	the risk of failure to increase our brand recognition;

	•	the risk of damage to or interruption of our infrastructure; and

	•	the risk of failure to maintain existing, or establish similar new, arrangements with travel suppliers.

Our Strategy

Our goal is to create long-term shareholder value by enhancing our position as a leading hotel and airline ticket consolidator in China. We believe that China’s currently highly fragmented travel industry and under-served independent travelers have provided us with tremendous growth opportunities. We intend to pursue the following strategies to achieve our goal:



	•	leverage the Ctrip brand to attract new travel suppliers and negotiate more favorable contractual terms with our existing suppliers, and strengthen the Ctrip brand by continuing to pursue a focused marketing and advertising campaign;


	•	expand our hotel supplier network and room inventory, primarily through focusing the expansion on hotels with three-, four- and five-star ratings and continuing to pursue guaranteed allotment arrangements with our hotel suppliers;

	•	expand air-ticketing and other travel product offerings, primarily through establishing airline ticket issuance and delivery infrastructure in more cities throughout China and further promoting the packaged-tour products that we offer;

	•	enhance transaction and service platform, primarily through continuing to invest in the training of our customer service representatives and upgrading of our information technology systems underlying our customer service center and websites;

	•	pursue selective strategic acquisitions and expand into Hong Kong, Macau and Taiwan, through exploring acquisitions that would allow us to expand the reach and scope of our travel products and services as well as our customer base in China, Hong Kong, Macau and Taiwan; and


	•	expand into the merchant business, through gradually establishing merchant business relationships with some of our travel suppliers.

Corporate Information

We were incorporated in the Cayman Islands. Since commencing operations in 1999, we have conducted substantially all of our operations in China. We maintain our operational headquarters in Shanghai, and have regional offices in Beijing, Guangzhou, Shenzhen and Hong Kong. We also maintain a network of sales offices in about 30 cities in China. The existing institutional shareholders owning more than 5% of our company include Carlyle Asia Venture Partners I, L.P., IDG Technology Venture Investments, Inc., Tiger Technology Private Investment Partners, L.P. and S.I. Technology Venture Capital Limited.

Our principal executive offices are located at 3F, Building 63-64, No. 421 Hong Cao Road, Shanghai 200233, People’s Republic of China, and our telephone number is (8621) 3406-4880. Our principal website address is www.ctrip.com. The information on our websites is not part of this prospectus.

Corporate Structure

The following diagram illustrates our company’s organizational structure, and the place of formation, ownership interest and affiliation of each of our subsidiaries and affiliated entities.

(CTRIPORG CHART)

We conduct substantially all of our business through our wholly owned subsidiaries in China, namely, Ctrip Computer Technology (Shanghai) Co., Ltd., or Ctrip Computer Technology, and Ctrip Travel Information Technology (Shanghai) Co., Ltd., or Ctrip Travel Information. Due to the current restrictions on foreign ownership of the air-ticketing, travel agency, advertising and Internet content provision businesses in China, we conduct a small part of our operations in these businesses through a series of contractual arrangements with our affiliated Chinese entities. These entities include:


	•	Shanghai Ctrip Commerce Co., Ltd., or Ctrip Commerce, which holds advertising and Internet content provision licenses;

	•	Shanghai Huacheng Southwest Travel Agency Co., Ltd., or Shanghai Huacheng, which holds domestic travel agency and air-ticketing licenses;

	•	Beijing Chenhao Xinye Air-Ticketing Service Co., Ltd., or Beijing Chenhao, which holds an air-ticketing license;

	•	Guangzhou Guangcheng Commercial Service Co., Ltd., or Guangzhou Guangcheng, which has recently received an air-ticketing license; and

	•	Shanghai Cuiming International Travel Agency Co., Ltd., or Shanghai Cuiming, which holds a license to conduct both cross-border and domestic packaged-tour businesses.

Qi Ji, who is a co-founder and director of our company, Min Fan, who is a co-founder and executive vice president of our company, and Alex Nanyan Zheng, who is a vice president of our company, are principal owners of our affiliated Chinese entities. We have made interest-free loans to Qi Ji, Min Fan and Alex Nanyan Zheng solely in connection with the capitalization or acquisition of our affiliated entities. Each of these loans will mature ten years after the date of the applicable loan agreement. In the event that the Chinese government lifts its restrictions on foreign ownership of the air-ticketing, travel agency, advertising or Internet content provision business in China, we will exercise our right to purchase all of the outstanding equity interests of our affiliated Chinese entities immediately, and the loans will be cancelled in connection with such purchase. For a detailed description of the terms of these loans, see “Related Party Transactions — Arrangements with Affiliated Chinese Entities.”

We formed Home Inns & Hotels Management (Hong Kong) Limited, or Home Inns, in 2001 to expand our business line to include the hotel management service. Through a series of subsequent transactions, we reduced our interest in Home Inns to 31.16%. We spun off our remaining interest in Home Inns in August 2003 to prepare for the offering to enable us to focus on our core business of travel consolidation.

The Offering


American Depositary Shares offered:
By Ctrip:

U.S. offering		1,350,000 ADSs


International offering		1,350,000 ADSs


Total:		2,700,000 ADSs


By the selling shareholders:

U.S. offering		750,000 ADSs


International offering		750,000 ADSs


Total:		1,500,000 ADSs



The ADSs		Each ADS represents two ordinary shares, par value US$0.01 per share. The ADSs will be evidenced by American Depositary Receipts, or ADRs. As an ADR holder, we will not treat you as one of our shareholders. The depositary will be the holder of the shares underlying your ADSs. You will have ADR holder rights as provided in the deposit agreement. Under the deposit agreement, you may instruct the depositary to vote the shares underlying your ADSs but only if we ask the depositary to ask for your instructions. You must pay US$5.00 (or less) per 100 ADSs or less for each issuance or cancellation of an ADS, a fee for each distribution of securities by the depositary based on the number of shares deposited for issuance of ADSs, US$0.02 (or less) per ADS per year for depositary services, fees for transfer and registration of your shares, and any expenses incurred by the depositary as necessary. You may turn in your ADRs at the depositary’s office and the depositary will deliver the deliverable shares underlying your ADRs to you. If we offer holders of our ordinary shares any rights to subscribe for additional shares or any other rights, the depositary may make these rights available to you. However, U.S. securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after exercise of these rights. To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus. We may amend or terminate the deposit agreement for any reason without your consent. If an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to be bound by the deposit agreement as amended.



ADSs outstanding after the offering		4,200,000 ADSs.



Ordinary shares outstanding after the offering		30,030,894 ordinary shares, excluding outstanding stock options to purchase an aggregate of 1,535,760 ordinary shares at an exercise price of US$0.7716 per ordinary share and outstanding stock options to purchase additional 711,660 ordinary shares at an exercise price of US$2.11 per ordinary share, 50,000 ordinary shares at an exercise price of US$5.00 per ordinary share, 80,000 ordinary shares at an exercise price of US$6.00 per ordinary share, 103,980 ordinary shares at an exercise price equal to 80% of the



		midpoint of the filing range, and 35,000 ordinary shares at an exercise price equal to 90% of the midpoint of the filing range.



Dividends and other distributions		The depositary agrees to pay to you the cash dividends or other distributions it receives on shares or other deposited securities after deducting its fees and expenses. The depositary will convert any cash dividend or other cash distribution we pay on the shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. The depositary may send to you anything else we distribute on deposited securities by means it thinks legal, fair and practical. If it cannot make the distribution that way, the depositary may decide to sell what we distributed and distribute the net proceeds in the same as it does with cash or hold what we distributed.



Use of proceeds		We may use the net proceeds from this offering as follows: (i) up to US$3.0 million to fund working capital; (ii) up to US$5.0 million to fund capital expenditures, including technology upgrades; (iii) up to US$5.0 million to expand our sales and marketing efforts; and (iv) the balance for general corporate purposes, including funding possible acquisitions of complementary businesses, although we are not currently negotiating any such transactions.


		We will not receive any of the proceeds from the sale of ADSs by the selling shareholders.

Risk factors		See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the ADSs.

Proposed Nasdaq National Market symbol		CTRP.

Depositary		The Bank of New York.

Summary Consolidated Financial Data

You should read the following information with our consolidated financial statements and related notes, “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

The summary consolidated statement of operations data for 2001 and 2002 and the nine months ended September 30, 2003, and the consolidated balance sheet data as of December 31, 2001 and 2002 and September 30, 2003, are derived from our audited consolidated financial statements included elsewhere in this prospectus and should be read in conjunction with, and are qualified in their entirety by reference to, these consolidated financial statements and related notes. These consolidated financial statements have been audited by PricewaterhouseCoopers and were prepared in accordance with generally accepted accounting principals in the United States, or U.S. GAAP. The summary consolidated statement of operations data for 2000 and the nine months ended September 30, 2002, and the consolidated balance sheet data as of December 31, 2000 and September 30, 2002, set forth below are derived from our unaudited consolidated financial statements included elsewhere in this prospectus and should be read in conjunction with, and are qualified in their entirety by reference to, these unaudited consolidated financial statements and related notes. We have prepared the unaudited information on the same basis as the audited consolidated financial statements, and have included, in our opinion, all adjustments, consisting only of normal and recurring adjustments that we consider necessary for a fair presentation of the financial information set forth in those statements.



			Year Ended December 31,												Nine Months Ended September 30,

			2000			2001			2002			2002			2002			2003			2003

			RMB			RMB			RMB			US$(2)			RMB			RMB			US$(2)
			(unaudited)												(unaudited)

			(in thousands, except for share and per share data)
Consolidated Statements of Operation Data:
	Net revenues			6,453			43,984			100,049			12,087			68,809			105,717			12,772
	Costs of services			(1,950	)		(7,940	)		(13,673	)		(1,652	)		(9,100	)		(14,447	)		(1,745	)
	Gross profit			4,503			36,044			86,376			10,435			59,709			91,270			11,027
	Operating expenses			(36,243	)		(55,696	)		(63,106	)		(7,624	)		(45,379	)		(55,384	)		(6,691	)
	Income (loss) from operations			(31,740	)		(19,652	)		23,270			2,811			14,330			35,886			4,336
	Net income (loss)			(23,977	)		(15,261	)		14,193			1,715			8,456			29,192			3,527
Earnings per Share Data:
	Accretion for Series B preferred shares			(2,196	)		(14,316	)		(16,492	)		(1,993	)		(12,140	)		(12,366	)		(1,494	)
	Cash dividends to holders of Series A and Series B preferred shares			—			—			(16,762	)		(2,025	)		—			—			—
	Deemed dividends to holders of Series A and Series B preferred shares for spin-off of joint venture companies(3)			—			—			—			—			—			(2,829	)		(342	)
	Deemed dividends upon repurchase of Series A and Series B preferred shares			—			—			—			—			—			(35,336	)		(4,269	)
	Net loss attributable to ordinary shareholders			(26,173	)		(29,578	)		(19,061	)		(2,303	)		(3,684	)		(21,339	)		(2,578	)
	Loss per share:
		basic and diluted		(3.03	)		(3.26	)		(2.00	)		(0.24	)		(0.39	)		(2.26	)		(0.27	)
	Loss per ADS(1):
		basic and diluted		(6.06	)		(6.52	)		(4.00	)		(0.48	)		(0.78	)		(4.52	)		(0.54	)



								As of September 30, 2003

		As of December 31,
		2002						Actual				As adjusted(4)

		RMB			US$(2)			RMB		US$(2)		RMB		US$(2)

												(unaudited)

		(in thousands)
Consolidated Balance Sheet Data:
	Cash		38,931			4,703			70,353		8,500		369,984		44,700
	Total assets		97,255			11,750			151,999		18,364		451,630		54,564
	Series B preferred shares(5)		124,963			15,097			—		—		—		—
	Total shareholders’ equity (deficit)		(41,629	)		(5,029	)		109,032		13,173		408,663		49,373



(1)	Each ADS represents two ordinary shares.


(2)	Translations from RMB amounts into U.S. dollars were made at a rate of RMB8.2771 to U.S.$1.00. See “Exchange Rate Information.”

(3)	On August 27, 2003, we resolved to distribute all of our equity interest in Home Inns to the then existing holders of our ordinary shares and Series A and Series B preferred shares on a pro rata as-converted basis based on the carrying value of the equity interest in the amounts of RMB1,782,559, RMB808,827 and RMB2,020,237, respectively.


(4)	As adjusted to reflect the conversion of all of our preferred shares into ordinary shares, which will occur automatically immediately prior to the closing of this offering, and the issuance and sale of 2,700,000 ADSs offered hereby with estimated net proceeds of US$36.2 million, after deducting underwriting discounts, commissions and estimated offering expenses.



(5)	Prior to the forfeiture of the redemption feature in September 2003, Series B preferred shares were not included as part of shareholders’ equity as such shares were redeemable at the option of the holder. As of September 30, 2003, Series B preferred shares are included in total shareholders’ equity (deficit).

RISK FACTORS

Investing in our ADSs involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this prospectus before making an investment decision. The risks described below are not the only ones facing our company. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading price of our ADSs could decline due to any of these risks and you may lose all or part of your investment.

Risks Related to Our Company

Our limited operating history makes evaluating our business and prospects difficult.

We began our operations in 1999. As a result, we have a limited operating history for you to evaluate our business. It is also difficult to evaluate our prospective business, because we may not have sufficient experience to address the risks frequently encountered by early stage companies using new and unproven business models and entering new and rapidly evolving markets, including markets for online commerce and frequent independent travelers. These risks include our potential failure to:


	•	obtain new customers at reasonable cost, retain existing customers, encourage repeat purchases or convert visitors to our websites into customers;

	•	increase awareness of the Ctrip brand and continue to build user loyalty;

	•	retain existing hotels, airlines and other suppliers of travel services or expand our service offerings on satisfactory terms from our travel suppliers;

	•	adequately and efficiently operate, upgrade and develop the systems that we use to process customers’ reservations;

	•	maintain adequate control of our expenses;

	•	attract and retain qualified personnel;

	•	respond to technological changes; or

	•	respond to competitive market conditions.

If we are unsuccessful in addressing any of these risks, our business will be materially adversely affected.

We have sustained losses in the past and may experience earnings declines or net losses in the future.

We sustained net losses in the periods prior to 2002. We cannot assure you that we can sustain profitability or avoid net losses in the future. We expect that our operating expenses will increase and the degree of increase in these expenses will be largely based on anticipated organizational growth and revenue trends. As a result, any decrease or delay in generating additional sales volume and revenue could result in substantial operating losses.

Declines or disruptions in the travel industry generally could reduce our revenue.

A large part of our business is currently driven by the trends that occur in the travel industry in China, including the hotel, airline and packaged-tour industries. As the travel industry is highly sensitive to business and personal discretionary spending levels, it tends to decline during general economic downturns. In addition, other adverse trends or events that tend to reduce travel and are likely to reduce our revenues include:


	•	a recurrence of SARS or any other serious contagious diseases;

	•	increased prices in the hotel, airline, or other travel-related industries;


	•	increased occurrence of travel-related accidents;

	•	poor weather conditions; and

	•	natural disasters.

We could be severely affected by changes in the travel industry and will, in many cases, have little or no control over those changes.

The recurrence of SARS may materially and adversely affect our business and operating results.

In early 2003, several economies in Asia, including Hong Kong and China, were affected by the outbreak of SARS. The travel industry in China, Hong Kong and some other parts of Asia suffered tremendously as a result of the outbreak of SARS. Although none of our employees was infected with SARS, our business and operating results were adversely affected. Total room nights booked through us decreased from 131,426 and 122,716 in May 2002 and June 2002, respectively, to 36,894 and 109,751 in May 2003 and June 2003, respectively.

If there is a recurrence of an outbreak of SARS, it may adversely affect our business and operating results. For example, a future SARS outbreak could result in quarantines or closures to our customer service center in Shanghai if our employees are infected with SARS. In addition, ongoing concerns regarding SARS, particularly its effect on travel, could negatively impact our China-based customers’ desire to travel. If there is a recurrence of an outbreak of SARS, travel to and from SARS-affected regions could be curtailed. Continued or additional restrictions on travel to and from these and other regions on account of SARS could have a material adverse effect on our business, results of operations and financial condition.

Our business may be harmed if our infrastructure and technology are damaged or otherwise fail or become obsolete.

Our customer service center and substantially all of our computer and communications systems are located at a single facility in Shanghai and are therefore vulnerable to damage or interruption from human error, computer viruses, fire, flood, power loss, telecommunications failure, physical or electronic break-ins, sabotage, vandalism, natural disasters and similar events. We currently do not have redundant systems and do not carry business interruption insurance to compensate us for losses that may occur.

We use an internally developed booking software system that supports nearly all aspects of our booking transactions. Our business may be harmed if we are unable to upgrade our systems and infrastructure fast enough to accommodate future traffic levels, or to avoid obsolescence, or successfully integrate any newly developed or purchased technology with our existing system. Capacity constraints could cause unanticipated system disruptions, slower response times, poor customer service, impaired quality and speed of reservations and confirmations, and delays in reporting accurate financial and operating information. These factors could cause us to lose customers and suppliers.

If we are unable to maintain existing, and establish new, arrangements with hotel suppliers similar to those we currently have, our business may suffer.

If we are unable to maintain satisfactory relationships with our existing hotel suppliers, or if our hotel suppliers establish similar or more favorable relationships with our competitors, our operating results and our business would be harmed, because we would not have the necessary supply of hotel rooms or hotel rooms at satisfactory rates to meet the needs of our customers. Our business depends significantly upon our ability to contract with hotels in advance for the guaranteed availability of a specified number of hotel rooms. We rely on hotel suppliers to provide us with rooms at discounted prices. However, our contracts with our hotel suppliers are not exclusive and most of the contracts must be renewed semi-annually or annually. We cannot assure you that our hotel suppliers will renew our contracts in the future on terms similar to those we currently have. Furthermore, in order to maintain and grow our business, we will need to establish new arrangements with hotels in our existing markets and in new markets. We cannot assure you that we will be

able to identify appropriate hotels or enter into arrangements with those hotels on favorable terms, if at all. This failure could harm the growth of our business and, consequently, the price of our ADSs.

If we are unable to maintain existing arrangements with our airline ticket suppliers, our business may be harmed.

We derive significant benefits, including revenues, from our arrangements with major domestic airlines in China and many international airlines operating flights originating from China. Our airline ticket suppliers allow us to book and sell tickets on their behalf and collect commissions on tickets booked and sold through us. Although we currently have supply relationships with these airlines, these airlines also compete with us for ticket bookings and have entered into similar arrangements with many of our competitors and may continue to do so in the future. Such arrangements may be on better terms than we have. We cannot assure you that any of these airlines will continue to have supplier relationships with us. The loss of these supplier relationships would impair the profitability of our business as we would lose a significant source of our net revenues.

If we fail to increase our brand recognition, we may face difficulty in obtaining new business partners and consumers, and our business may be harmed.

We believe that establishing, maintaining and enhancing the Ctrip brand is a critical aspect of our efforts to grow our customer base and obtain new business partners. Some of our potential competitors already have well-established brands in the travel industry, increasing the importance of increasing and maintaining our brand recognition. The promotion of our brand will depend largely on our success in maintaining a sizeable and active customer base, providing high-quality customer service and organizing effective marketing and advertising programs. If our current customer base significantly declines, or the quality of our customer services substantially deteriorates, or if we fail to cost-effectively promote and maintain our brand, our business, operating results and financial condition would be materially adversely affected.

New competitors face low entry barriers to our industry, and if we do not compete successfully against new and existing competitors, we may lose our market share, and our profitability may be adversely affected.

We compete primarily with other consolidators of hotel accommodations and flight reservation services, such as www.elong.com. We also compete with traditional travel agencies.

In the future, we may also face competition from new players in the hotel consolidation market in China and abroad, such as expedia.com and hotels.com, that may enter China in the future. We may face more competition from hotels and airlines as they enter the discount rate market directly or through alliances with other travel consolidators. Our industry is characterized by relatively low fixed costs. In addition, like all other consolidators, we do not have exclusive arrangements with our travel suppliers. The combination of these two factors presents potential entrants to our industry with relatively low entry barriers.

Increased competition could reduce our operating margins and profitability and result in loss of market share. Some of our existing and potential competitors may have competitive advantages, such as significantly greater financial, marketing or other resources and may be able to mimic and adopt our business model. We cannot assure you that we will be able to successfully compete against new or existing competitors.

We may not be able to prevent others from using our intellectual property, which may harm our business and expose us to litigation.

We regard our domain names, trade names, trade marks and similar intellectual property as critical to our success. We try to protect our intellectual property rights by relying on trade mark protection and confidentiality laws and contracts. The trade mark and confidentiality protection in China may not be as effective in the United States. Policing unauthorized use of proprietary technology is difficult and expensive.

The steps we have taken may be inadequate to prevent the misappropriation of our proprietary technology. Any misappropriation could have a negative effect on our business and operating results. Furthermore, we may need to go to court to enforce our intellectual property rights. Litigation relating to our intellectual property might result in substantial costs and diversion of resources and management attention. See “— Risks Related to Doing Business in China — Uncertainties with respect to the Chinese legal system could adversely affect us.”

Our business depends substantially on the continuing efforts of our key executives, and our business may be severely disrupted if we lose their services.

Our future success heavily depends upon the continued services of our key executives, particularly James Jianzhang Liang, Neil Nanpeng Shen and Min Fan, who are the Chief Executive Officer, Chief Financial Officer and Executive Vice President of our company, respectively. We rely on their expertise in business operations, finance and travel services and on their relationships with our shareholders, suppliers and regulators. We do not maintain key-man life insurance for any of our key executives. If one or more of our key executives are unable or unwilling to continue in their present positions, we may not be able to easily replace them or at all. Therefore, our business may be severely disrupted, our financial conditions and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit and train personnel.

In addition, if any of these key executives joins a competitor or forms a competing company, we may lose customers and suppliers. Each of our executive officers has entered into an employment agreement with us, which contains confidentiality and non-competition provisions. If any disputes arise between our executive officers and us, we cannot assure you the extent to which any of these agreements would be enforced in China, where these executive officers reside and hold most of their assets, in light of the uncertainties with China’s legal system. See “— Risks Related to Doing Business in China — Uncertainties with respect to the Chinese legal system could adversely affect us.”

Chinese laws and regulations restrict foreign investment in the air-ticketing, travel agency, advertising and Internet content provision businesses, and substantial uncertainties exist with respect to the application and implementation of Chinese laws and regulations.

We are a Cayman Islands corporation and a foreign person under Chinese laws. Due to the foreign ownership restrictions in the air-ticketing, travel agency, advertising and Internet content provision industries, we conduct part of our business through contractual arrangements with our affiliated Chinese entities. These entities hold the licenses and approvals that are essential for our business operations.

In the opinion of our Chinese counsel, our current ownership structures, the ownership structure of our wholly owned subsidiaries and our affiliated Chinese entities, the contractual arrangements among us, our wholly owned subsidiaries, our affiliated Chinese entities and their shareholders, and our business operations as described in this prospectus, are in compliance with all existing Chinese laws, rules and regulations. There are, however, substantial uncertainties regarding the interpretation and application of current or future Chinese laws and regulations. Accordingly, we cannot assure you that Chinese government authorities will not ultimately take a view contrary to the opinion of our Chinese legal counsel.

If we and our affiliated Chinese entities are found to be in violation of any existing or future Chinese laws or regulations, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation, levying fines, confiscating our income, or the income of our affiliated Chinese entities, revoking our business licenses, or the business licenses of our affiliated Chinese entities, requiring us and our affiliated Chinese entities to restructure our ownership structure or operations, and requiring us or our affiliated Chinese entities to discontinue any portion or all of our Internet content provision, air-ticketing, travel agency or advertising businesses.

Any of these actions could cause significant disruption to our business operations and may materially and adversely affect our business, financial condition and results of operations.

If our affiliated Chinese entities violate our contractual arrangements with them, our business could be disrupted, our reputation may be harmed and we may have to resort to litigation to enforce our rights which may be time consuming and expensive.

As the Chinese government restricts our ownership of Internet content provision, air-ticketing, travel agency and advertising businesses in China, we depend on our affiliated Chinese entities, in which we have no ownership interest, to conduct part of our non-hotel reservation business activities through a series of contractual arrangements, which are intended to provide us with the effective control over these entities. Although we have been advised by our Chinese counsel that these contractual arrangements are valid, binding and enforceable under current Chinese laws, these arrangements may not be as effective in providing control as direct ownership of these businesses. For example, our affiliated Chinese entities could violate our contractual arrangements with them by, among other things, failing to operate our air-ticketing, packaged-tour or advertising business in an acceptable manner. In any such event, we would have to rely on the Chinese legal system to enforce those agreements. Any legal proceeding could result in the disruption of our business, damage to our reputation, diversion of our resources and the incurrence of substantial costs. See “— Risks Related to Doing Business in China — Uncertainties with respect to the Chinese legal system could adversely affect us.”

The principal shareholders of our affiliated Chinese entities have potential conflicts of interest with us, which may adversely affect our business.

Our director, Qi Ji, and our officers, Min Fan and Alex Nanyan Zheng, are also the principal shareholders of our affiliated Chinese entities. Thus, conflicts of interest between their duties to our company and our affiliated entities may arise. We cannot assure you that when conflicts of interest arise, these persons will act completely in our interests or that conflicts of interests will be resolved in our favor. The conflicts may result in our loss of corporate opportunities. In addition, these persons could violate their non-competition or employment agreements with us or their legal duties by diverting business opportunities from us to others. In any such event, we would have to rely on the Chinese legal system to enforce these agreements. Any legal proceeding could result in the disruption of our business, diversion of our resources and the incurrence of substantial costs. See “— Risks Related to Doing Business in China — Uncertainties with respect to the Chinese legal system could adversely affect us.”

Our subsidiaries and affiliated entities in China are subject to restrictions on paying dividends or making other payments to us.

We are a holding company incorporated in the Cayman Islands. We rely on dividends from our subsidiaries in China and consulting and other fees paid to us by our affiliated Chinese entities. Current Chinese regulations permit our subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, our subsidiaries in China are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds. These reserves are not distributable as cash dividends. Further, if our subsidiaries and affiliated entities in China incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.

The air-ticketing, travel agency, advertising and Internet industries are heavily regulated by the Chinese government. If we fail to obtain or maintain all pertinent permits and approvals, our business operations may be adversely affected.

The air-ticketing, travel agency, advertising and Internet industries are heavily regulated by the Chinese government. We are required to obtain applicable permits or approvals from different regulatory authorities in order to conduct our business, including separate licenses for Internet content provision, air-ticketing, advertising and travel agency activities. If we fail to obtain or maintain any of the required permits or approvals, we may be subject to various penalties, such as fines or suspension of operations in these regulated businesses, which could severely disrupt our business operations. As a result, our financial condition and results of operations may be adversely affected.

Our business could suffer if we do not successfully manage current growth and potential future growth.

Our business has grown very quickly in its few years of operation. We have rapidly expanded our operations and anticipate further expansion of our operations and workforce. Our growth to date has placed, and our anticipated future operations will continue to place, a significant strain on our management, systems and resources. In addition to training and managing our workforce, we will need to continue to improve and develop our financial and managerial controls and our reporting systems and procedures. We cannot assure you that we will be able to efficiently or effectively manage the growth of our operations, and any failure to do so may limit our future growth and hamper our business strategy.

Future acquisitions may have an adverse effect on our ability to manage our business.

Selective acquisitions forms part of our strategy to further expand our business. If we are presented with appropriate opportunities, we may acquire additional complementary companies, products or technologies. Future acquisitions and the subsequent integration of new companies into ours would require significant attention from our management. The diversion of our management’s attention and any difficulties encountered in any integration process could have an adverse effect on our ability to manage our business. Future acquisitions would expose us to potential risks, including risks associated with the assimilation of new operations, technologies and personnel, unforeseen or hidden liabilities, the diversion of resources from our existing businesses and technologies, the inability to generate sufficient revenue to offset the costs and expenses of acquisitions, and potential loss of, or harm to, relationships with employees, customers and suppliers as a result of integration of new businesses.

We may need additional capital and we may not be able to obtain it.

We believe that our current cash and cash equivalents, cash flow from operations and the proceeds from this offering will be sufficient to meet our anticipated cash needs for the foreseeable future. We may, however, require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

We rely on services from third parties to carry out our business and to deliver our products to customers, and if there is any interruption or deterioration in the quality of these services, our customers may not continue using our services.

We rely on third-party computer systems to host our websites, as well as third-party licenses for some of the software underlying our technology platform. In addition, we rely on third-party travel agencies to issue airline tickets, confirmations and deliveries in some cities in China. Any interruption in our ability to obtain the products or services of these or other third parties or deterioration in their performance could impair the timing and quality of our own service. If our service providers fail to deliver airline tickets in a timely manner to our customers, our services will not meet the expectations of our customers and our reputation and brand will be damaged. Furthermore, if our arrangements with any of these third parties are terminated, we may not find an alternate source of support on a timely basis or on terms as advantageous to us.

If our hotel suppliers or customers provide us with untrue information regarding our customers’ stay, our commission income and revenues may decrease.

Currently, a substantial portion of our revenues is represented by commissions received from hotels for room nights booked through us. Generally, we do not receive payment from our customers on behalf of our hotel suppliers, as our customers pay hotels directly. To confirm whether a customer adheres to the booked itinerary, we make routine inquiries with the hotel and, occasionally, the customer. We rely on the

hotel and the customer to give us truthful information regarding the customer’s check-in and check-out dates, which information forms the basis for calculating the commission we are entitled to receive from the hotel. If our hotel suppliers or customers provide us with untrue information with respect to our customers’ length of stay at the hotels, our hotel revenue may decrease.

As we begin to expand into the merchant business, we may suffer losses if we are unable to predict the amount of inventory we will need to purchase.

We plan to gradually establish merchant business relationships with selected travel service suppliers beginning in the second or third quarter of 2004. In the merchant business relationship, we would buy hotel rooms and/or airline tickets in advance before selling them to our customers and thereby bear the inventory risk. If we do not correctly predict demand for hotel rooms and airline tickets that we are committed to purchase, we would be responsible for covering the cost of the hotel rooms and airline tickets we are unable to sell.

We may be subject to litigation for information provided on our websites, which may be time-consuming to defend.

Our websites contain information about hotels, flights, popular vacation destinations and other travel-related topics. It is possible that if any information, accessible on our websites, contains errors or false or misleading information, third parties could take action against us for losses incurred in connection with the use of such information. Any claims, with or without merit, could be time-consuming to defend, result in litigation and divert management’s attention and resources.

We could be liable for breaches of security on our websites and fraudulent transactions by users of our websites.

Currently, a portion of our transactions are conducted through our websites. In such transactions, secured transmission of confidential information (such as customers’ itineraries, hotel and other reservation information, credit card numbers and expiration dates, personal information and billing addresses) over public networks is essential to maintain consumer and supplier confidence. Our current security measures may not be adequate. Security breaches could expose us to litigation and possible liability for failing to secure confidential customer or supplier information and could harm our reputation and ability to attract customers.

If we are unable to attract, train and retain key individuals and highly skilled employees, our business may be adversely affected.

If our business continues to expand, we will need to hire additional employees, including travel supplier management personnel to maintain and expand our travel supplier network, information technology and engineering personnel to maintain and expand our websites, customer service center and systems, and customer support personnel to serve an increasing number of customers. If we are unable to identify, attract, hire, train and retain sufficient employees in these areas, users of our websites and customer service center may have negative experiences and turn to our competitors, which could adversely affect our business and results of operations.

We have limited business insurance coverage in China.

The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products. As a result, we do not have any business liability or disruption insurance coverage for our operations in China. Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources.

Facts and statistics in this prospectus relating to the China travel industry and economy may be inaccurate.

Facts and statistics in this prospectus relating to the Chinese travel industry and economy are derived from various government and institute research publications. While we have taken reasonable care to ensure that the facts and statistics presented are accurately reproduced from such sources, they have not been independently verified by us. Due to possibly flawed or ineffective collection methods and other problems in China, the statistics in this prospectus may be inaccurate or may not be comparable to statistics produced for other economies and should not be unduly relied upon. Further, there can be no assurance that they are stated or compiled on the same basis or with the same degree of accuracy as may be the case in the U.S. or elsewhere.

Risks Related to Doing Business in China

Adverse changes in political and economic policies of the Chinese government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our services and adversely affect our competitive position.

Substantially all of our operations are conducted in China and substantially all of our revenues are sourced from China. Accordingly, our results of operations, financial condition and prospects are subject to a significant degree to the economic, political and legal developments of China. Since the late 1970s, the Chinese government has been reforming the economic system in China. These reforms have resulted in significant economic growth. However, any economic reform policies or measures in China may from time to time be modified or revised. Any adverse changes in economic conditions in China, in policies of the Chinese government or in laws and regulations in China, could have a material adverse effect on the overall economic growth of China and investment in the travel industry. Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely affect our competitive position.

Slow-down of the Chinese economy may slow down our growth and profitability.

Our financial results have been, and are expected to continue to be, affected by the growth in the Chinese economy and travel industry. Although the Chinese economy has grown significantly in the past decade, there can be no assurance that growth of the Chinese economy will continue or that any slow-down will not have a negative effect on our business. The overall Chinese economy affects our profitability, since expenditures for travel may decrease in a slowing economy.

Future movements in exchange rates between the U.S. dollar and RMB may adversely affect the value of our ADSs.

We are exposed to foreign exchange risk arising from various currency exposures. Some of our expenses are denominated in foreign currencies while almost all of our revenues are denominated in RMB, the legal currency in China. We have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency risk. The value of RMB is subject to changes in the Chinese government’s policies. Although our exposure to foreign exchange risks is limited, the value of your investment in our ADSs will be affected by the foreign exchange rate between the U.S. dollar and RMB, because the value of our business is effectively denominated in RMB, while our ADSs will be traded in U.S. dollars.

Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.

Because substantially all of our revenues are in the form of RMB, any restrictions on currency exchange may limit our ability to use revenue generated in RMB to fund our business activities outside China or to make dividend payments in U.S. dollars. The principal regulation governing foreign currency exchange in China is the Foreign Currency Administration Rules (1996), as amended. Under the Rules, RMB is freely convertible for trade and service-related foreign exchange transactions, but not for direct investment, loan or investment in securities outside China unless the prior approval of the State Administration for Foreign

Exchange is obtained. Although the Chinese government regulations now allow greater convertibility of RMB for current account transactions, significant restrictions still remain. For example, foreign exchange transactions under our subsidiaries’ capital account, including principal payments in respect of foreign currency-denominated obligations, remain subject to significant foreign exchange controls and the approval of the State Administration of Foreign Exchange of the People’s Republic of China. These limitations could affect our ability to obtain foreign exchange for capital expenditures. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of RMB, especially with respect to foreign exchange transactions.

Online payment systems in China are at an early stage of development and may restrict our ability to expand our online commerce service business.

Online payment systems in China are at an early stage of development. Although major Chinese banks are instituting online payment systems, these systems are not as widely available or acceptable to consumers in China as in the United States and other developed countries. In addition, only a limited number of consumers in China have credit cards or debit cards, relative to countries like the United States. The lack of adequate online payment systems may limit the number of online commerce transactions that we can service. If online payment services do not develop, our ability to grow our online commerce business may be limited.

The Internet market has not been proven as an effective commercial medium in China.

The market for Internet products and services in China has only recently begun to develop. The Internet penetration rate in China is lower than those in the United States and other developed countries. Since the Internet is an unproven medium for commerce in China, our future operating results from online services will depend substantially upon the increased use and acceptance of the Internet for distribution of products and services and facilitation of commerce in China.

The Internet may not become a viable commercial marketplace in China for various reasons in the foreseeable future. More salient impediments to Internet development in China include:


	•	consumer dependence on traditional means of commerce;

	•	inexperience with the Internet as a sales and distribution channel;

	•	inadequate development of the necessary infrastructure to facilitate online commerce;

	•	concerns about security, reliability, cost, ease of deployment, administration and quality of service associated with conducting business over the Internet;

	•	inexperience with credit card usage or with other means of electronic payment; and

	•	limited use of personal computers.

If the Internet is not widely accepted as a medium for online commerce in China, our ability to grow our online business would be impeded.

Uncertainties with respect to the Chinese legal system could adversely affect us.

We conduct our business primarily through our wholly owned subsidiaries incorporated in China. Our subsidiaries are generally subject to laws and regulations applicable to foreign investment in China and, in particular, laws applicable to wholly foreign-owned enterprises. In addition, we depend on several affiliated entities in China to honor their service agreements with us. Almost all of these agreements are governed by Chinese law and disputes arising out of these agreements are expected to be decided by arbitration in China. The Chinese legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, Chinese legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since these laws and regulations are relatively new and the Chinese legal system is still evolving, the interpretations of many laws,

regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit remedies available to us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

We have attempted to comply with the Chinese government regulations regarding licensing requirements by entering into a series of agreements with our affiliated Chinese entities. If the Chinese laws and regulations change, our business in China may be adversely affected.

To comply with the Chinese government regulations regarding licensing requirements, we have entered into a series of agreements with our affiliated Chinese entities to exert our operational control over them and secure consulting fees and other payments from them. Although we have been advised by our Chinese counsel that our arrangements with our affiliated Chinese entities are valid under current Chinese law and regulations, we cannot assure you that we will not be required to restructure our organization structure and operations in China to comply with changing and new Chinese laws and regulations. Restructuring of our operations may result in disruption of our business, diversion of management attention and the incurrence of substantial costs.

We may have to register our encryption software with Chinese regulatory authorities, and if they request that we change our encryption software, our business operations will be disrupted as we develop or license replacement software.

Pursuant to the Regulations for the Administration of Commercial Encryption promulgated in 1999, foreign and domestic Chinese companies operating in China are required to register and disclose to Chinese regulatory authorities the commercial encryption products they use. Because these regulations do not specify what constitutes encryption products, we are unsure whether or how they apply to us and the encryption software we utilize. We may be required to register or apply for permits with the relevant Chinese regulatory authorities for our current or future encryption software. If Chinese regulatory authorities request that we change our encryption software, we may have to develop or license replacement software, which could disrupt our business operations. In addition, we may be subject to potential liability for using software that is subsequently deemed to be illegal by the relevant Chinese regulatory authorities. These potential liabilities might include fines, product confiscation and criminal sanctions. We cannot assure you that our business, financial condition and results of operations will not be materially and adversely affected by the application of these regulations.

The continued growth of the Chinese Internet market depends on the establishment of an adequate telecommunications infrastructure.

Although private sector Internet service providers currently exist in China, almost all access to the Internet is maintained through ChinaNet owned by China Telecom under the administrative control and regulatory supervision of China’s Ministry of Information Industry. In addition, the national networks in China connect to the Internet through a government-controlled international gateway. This international gateway is the only channel through which a domestic Chinese user can connect to the international Internet network. We rely on this infrastructure and China Telecom to provide data communications capacity primarily through local telecommunications lines. Although the government has announced plans to develop aggressively the national information infrastructure, we cannot assure you that this infrastructure will be developed. In addition, we will have no access to alternative networks and services, on a timely basis if at all, in the event of any infrastructure disruption or failure. The Internet infrastructure in China may not support the demands associated with continued growth in Internet usage.

Risks Related to the Shares and ADSs

There has been no public market for our ordinary shares or ADSs prior to this offering, and therefore the price may fall below the public offering price.

Prior to this initial public offering, there has been no public market for our ordinary shares or ADSs. The initial public offering price for our ADSs will be determined by negotiations between us and the underwriters and may bear no relationship to the market price for our ADSs after the initial public offering. We cannot assure you that an active trading market will develop or that the market price of our ADSs will not decline below the initial public offering price.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement, the depositary bank will not offer you those rights unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act, or exempt from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

You will experience immediate and substantial dilution in the book value of ADSs purchased.

The public offering price per ADS will be substantially higher than the net tangible book value per ordinary share issued prior to this offering. Purchasers of our ADSs offered in the offering will therefore incur an immediate and substantial dilution in the net tangible book value per ADSs from the initial public offering price. See “Dilution.”

The future sales by our existing shareholders of a substantial number of our ADSs in the public market could adversely affect the price of our ADSs.

If our shareholders sell substantial amounts of our ordinary shares or ADSs, including those issued upon the exercise of outstanding options, in the public market following this offering, the market price of our ADSs could fall. Such sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. The 8,400,000 ordinary shares represented by 4,200,000 ADSs offered in this offering will be eligible for immediate resale in the public market without restrictions, and those held by our existing shareholders may also be sold in the public market in the future subject to the restrictions contained in Rule 144 under the Securities Act and applicable lock-up agreements. If any existing shareholder or shareholders sell a substantial amount of ordinary shares after the expiration of the lock-up period, the prevailing market price for our ADSs could be adversely affected. See “Underwriting” and “Shares Eligible for Future Sale” for additional information regarding resale restrictions.

The market price for our ADSs may be volatile.

The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:


	•	actual or anticipated fluctuations in our quarterly operating results;

	•	announcements of new services by us or our competitors;

	•	changes in financial estimates by securities analysts;

	•	conditions in the Internet, online commerce or travel industries;


	•	changes in the economic performance or market valuations of other Internet, online commerce or travel companies;

	•	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

	•	additions or departures of key personnel;

	•	release of lock-up or other transfer restrictions on our outstanding ADSs or sales of additional ordinary shares or ADSs; and

	•	potential litigation.

In addition, the securities market have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our ADSs.

You may not be able to exercise your right to vote.

As a holder of ADSs, you may instruct the depositary of our ADSs to vote the shares underlying your ADSs but only if we ask the depositary to ask for your instructions. Otherwise, you will not be able to exercise your right to vote unless you withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the shares. If we ask for your instructions, the depositary will notify you of the upcoming vote and arrange to deliver our voting materials to you. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do if the shares underlying your ADSs are not voted as you requested.

You may not receive distributions on ordinary shares or any value for them if it is illegal or impractical to make them available to you.

The depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. We have no obligation to register ADSs, ordinary shares, rights or other securities under U.S. securities laws. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. This means that you may not receive the distribution we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you. These restrictions may have a material adverse effect on the value of your ADSs.

You may lose some or all of the value of the distribution by the depositary if the depositary cannot convert RMB into U.S. dollars on a reasonable basis.

The depositary will convert any cash dividend or other cash distribution we pay on the ordinary shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any approval from any government is needed and cannot be obtained, the depositary is allowed to distribute RMB only to those ADS holders to whom it is possible to do so. It will hold RMB it cannot convert for the account of the ADS holders who have not been paid. However, it will not invest RMB and it will not be liable for interest. In addition, if the exchange rates fluctuate during a time when the

depositary cannot convert RMB, the ADS holders who have not been paid may lose some or all of the value of the distribution.

You may be subject to limitations on transfer of your ADSs.

Your ADSs represented by the ADRs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary thinks it advisory to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

The sale, deposit, cancellation and transfer of the ADSs issued after exercise of rights may be restricted.

If we offer holders of our ordinary shares any rights to subscribe for additional shares or any other rights, the depositary may make these rights available to you. However, the depositary may allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them. In addition, U.S. securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after exercise of rights. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act of 1933, as amended, with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. We can give no assurance that we can establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, you may be unable to participate in our rights offerings and may experience dilution of your holdings as a result.

If our subsidiaries are restricted from paying dividends and other distributions to us, our primary internal source of funds would decrease.

We are a holding company with no significant assets other than our equity interests in our wholly owned subsidiaries in China and Hong Kong. As a result, we rely on dividends, consulting and other fees paid to us by our subsidiaries and affiliated entities in China, including the funds necessary to service any debt we may incur. If our subsidiaries incur debts on their own behalf in the future, the instruments governing the debts may restrict their ability to pay dividends or make other distributions to us, which in turn would limit our ability to pay dividends on our ordinary shares. Chinese regulations permit payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting standards and regulations. Our subsidiaries and affiliated entities in China are also required to set aside a portion of their net income each year to fund certain reserve funds that are not distributable as cash dividends.

You may face difficulties in protecting your interests, and our ability to protect our rights through the U.S. federal courts may be limited, because we are incorporated under Cayman Islands law.

Our corporate affairs are governed by our memorandum and articles of association and by the Companies Law (2003 Revision) and common law of the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statues or judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws as compared to the U.S., and provides significantly less protection to investors. Therefore, our public shareholders may have more difficulties in protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the federal courts of the United States. As a result, our ability to protect our interests if we are harmed in a manner that would otherwise enable us to sue in a United States federal court may be limited.

Your ability to bring an action against us or against our directors and officers, or to enforce a judgment against us or them, will be limited because we are incorporated in the Cayman Islands, because we conduct a substantial portion of our operations in China and because the majority of our directors and officers reside outside of the U.S.

We are incorporated in the Cayman Islands, and we conduct a substantial portion of our operations in China through our wholly-owned subsidiaries and several affiliated entities in China. Most of our directors and officers reside outside of the United States and substantially all of the assets of those persons are located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the Cayman Islands or in China in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands and China, see “Enforceability of Civil Liabilities.”

We have not determined any specific use for a significant portion of the proceeds from this offering and we may use the proceeds in ways with which you may not agree.

We have not allocated the majority of the net proceeds of this offering to any particular purpose. Rather, our management will have considerable discretion in the application of the net proceeds received by us. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not improve our efforts to maintain profitability or increase our share price. The net proceeds from this offering may be placed in investments that do not produce income or that lose value.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Many statements made in this prospectus contain forward-looking statements that reflect our current expectations and views of future events. These forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other things:


	•	our anticipated growth strategies;

	•	our future business development, results of operations and financial condition;

	•	our ability to continue to control costs and maintain quality; and

	•	the expected growth of and change in the travel and online commerce industries in China.

The forward-looking statements included in the prospectus are subject to risks, uncertainties and assumptions about our company. Our company’s actual results of operations may differ materially from the forward-looking statements as a result of risk factors described under “Risk Factors” and elsewhere in this prospectus, including, among other things:


	•	our continuing ability to retain our customer base, build user loyalty and increase recognition of the Ctrip brand;

	•	the maintenance and expansion of our supplier relationships;

	•	risks inherent in the travel services businesses;

	•	our reliance on our technological platform; and

	•	risks associated with our holding company structure and the regulatory environment in China.

These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an emerging and evolving environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

USE OF PROCEEDS

We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and the estimated offering expenses payable by us, will be approximately US$36.2 million, assuming the initial offering price of US$15.0 per ADS. We will not receive any of the proceeds from the sale of ADSs by the selling shareholders.

The principal purposes of this offering are to (i) create a public market for our ordinary shares for the benefits of all shareholders, (ii) retain talented employees by providing them with equity incentives, and (iii) facilitate possible acquisitions of complementary businesses. We believe that, based on current levels of operations and anticipated growth, our cash from operations, together with cash currently available, without giving effect to the net proceeds of this offering, will be sufficient to fund our operations for the foreseeable future.

We may use the net proceeds from this offering as follows:



	•	up to US$3.0 million to fund working capital;



	•	up to US$5.0 million to fund capital expenditures, including technology upgrades;



	•	up to US$5.0 million to expand our sales and marketing efforts; and



	•	the balance for general corporate purposes, including funding possible acquisitions of complementary businesses, such as travel consolidators and travel agencies in Greater China, particularly in China, although we are not currently negotiating any such transactions.

As of the date of this prospectus, we cannot specify with certainty the particular uses for the net proceeds we will receive upon the completion of this offering. Accordingly, our management will have significant flexibility in applying the net proceeds of the offering.

Pending use of the net proceeds, we intend to hold our net proceeds in short-term bank deposits or invest them in interest-bearing, investment grade securities.

DIVIDEND POLICY

We do not have a present plan to pay any cash dividends on our ordinary shares, or indirectly on our ADSs, with respect to 2003. We currently intend to recommend to our shareholders, beginning in 2004, an annual dividend of not less than 25% of our net profits, if any, subject to our results of operations and as our board of directors deems appropriate. We intend to retain the remainder of our available funds and any future earnings for use in the operation and expansion of our business.

Our board of directors has complete discretion as to whether we will distribute dividends in the future, subject to the approval of our shareholders. Even if our board of directors determines to distribute dividends, the form, frequency and amount of our dividends will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors as the board of directors may deem relevant. Any dividend we declare will be paid to the holders of ADSs, subject to the terms of the deposit agreement, to the same extent as holders of our ordinary shares, less the fees and expenses payable under the deposit agreement. Any dividend we declare will be distributed by the depositary bank to the holders of our ADSs. Cash dividends on our ordinary shares, including those represented by the ADSs, if any, will be paid in U.S. dollars. See “Description of American Depositary Shares.”

In December 2002, we declared and paid out of our reserves cash dividends totaling RMB27.3 million, which represented a return of capital, to holders of our ordinary and preferred shares. Separately, as part of our restructuring in connection with this offering, we spun off Home Inns in August 2003 and distributed our Home Inns shares to our shareholders in the form of dividends on a pro rata as-converted basis.

CAPITALIZATION

The following table sets forth our cash and capitalization, as of September 30, 2003:


	•	on an actual basis;


	•	on an as adjusted basis to reflect the conversion of all of our preferred shares into ordinary shares, which will occur automatically immediately prior to the closing of this offering, and the issuance and sale of the 2,700,000 ADSs offered hereby with estimated net proceeds of US$36.2 million, after deducting underwriting discounts, commissions and estimated offering expenses.

You should read this table together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the information under “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”



			As of September 30, 2003


			Actual			As Adjusted

			RMB			RMB			US$(1)
						(unaudited)			(unaudited)

			(in thousands, except for share numbers)
Cash				70,353			369,984			44,700

Shareholders’ equity:
	Ordinary shares,
		US$0.01 par value; 49,157,064 shares authorized; 8,677,760 shares issued and outstanding;		719			2,487			301
	Series A preferred shares,
		US$0.01 par value; 3,937,518 shares authorized, issued and outstanding;		326			—			—
	Series B preferred shares,
		US$0.01 par value; 6,556,573 shares authorized, issued and outstanding;		543			—			—
	Series C preferred shares,
		US$0.01 par value; 2,180,755 shares authorized, issued and outstanding;		181			—			—
Additional paid-in capital				140,114			439,026			53,041
Deferred share-based compensation				(3,455	)		(3,455	)		(417	)
Cumulative translation adjustments				188			188			23
Accumulated deficit				(29,584	)		(29,584	)		(3,574	)

	Total shareholders’ equity			109,032			408,663			49,373

		Total capitalization		109,032			408,663			49,373


(1)	Translations of RMB amounts into U.S. dollars were made at a rate of RMB8.2771 to US$1.00. See “Exchange Rate Information.”

DILUTION

Our net tangible book value as of September 30, 2003 was RMB11.38, or US$1.38 per ordinary share, and US$2.76 per ADS. Net tangible book value per ordinary share represents the amount of total tangible assets, minus the amount of total liabilities, divided by the total number of ordinary shares outstanding. Dilution is determined by subtracting net tangible book value per ordinary share from the assumed public offering price per ordinary share.

Without taking into account any other changes in such net tangible book value after September 30, 2003, other than to give effect to (i) the conversion of all of our preferred shares into ordinary shares, which will occur immediately prior to the closing of this offering, and (ii) our sale of the 2,700,000 ADSs offered in this offering, at an estimated price of US$15.00 per ADS with estimated net proceeds of US$36.2 million after deduction of underwriting discounts and commissions and estimated offering expenses, our as adjusted net tangible book value at September 30, 2003 would have been US$1.60 per outstanding ordinary share, including ordinary shares underlying our outstanding ADSs, and US$3.20 per ADS. This represents an immediate increase in net tangible book value of US$0.22 per ordinary share, or US$0.44 per ADS, to existing shareholders and an immediate dilution in net tangible book value of US$5.90 per ordinary share, or US$11.80 per ADS, to purchasers of ADSs in this offering.

The following table illustrates the dilution on a per ordinary share basis assuming that the initial public offering price per ordinary share is US$7.50 and all ADSs are exchanged for ordinary shares:


Assumed initial public offering price per ordinary share	US$	7.50
Net tangible book value per ordinary share	US$	1.38

Amount of dilution in net tangible book value per ordinary share to new investors in the offering	US$	5.90

Amount of dilution in net tangible book value per ADS to new investors in the offering	US$	11.80

The following table summarizes on a pro forma basis the differences as of September 30, 2003 between our shareholders at September 30, 2003 and the new investors with respect to the number of ordinary shares purchased from us, the total consideration paid and the average price per ordinary share paid.



		Ordinary Shares
		Purchased					Total Consideration					Average Price		Average
												Per Ordinary		Price Per
		Number		Percent			Amount		Percent			Share		ADS

							US$					US$		US$
Shareholders as of September 30, 2003			24,630,894		82.0	%		16,727,672		29.2	%		0.68		1.36
New investors			5,400,000		18.0			40,500,000		70.8			7.50		15.00

	Total		30,030,894		100.0	%		57,227,672		100.0	%		8.18		16.36

The discussion and tables above are based on the number of ordinary shares and preferred shares outstanding as of September 30, 2003, excluding (a) 2,247,420 ordinary shares underlying options granted under our stock option plans and outstanding as of September 30, 2003, and (b) 668,090 ordinary shares available for issuance upon the exercise of future grants under our stock option plans.

To the extent that any of the outstanding options are exercised, there will be further dilution to new investors.

EXCHANGE RATE INFORMATION

Our business is primarily conducted in China and denominated in RMB. However, periodic reports made to shareholders will be expressed in U.S. dollars using the then current exchange rates. For your convenience, this prospectus contains translations of RMB amounts into U.S. dollars at specific rates solely for the convenience of the reader. The conversion of RMB into U.S. dollars in this prospectus is based on the noon buying rate in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB in this prospectus were made at a rate of RMB8.2771 to US$1.00, the noon buying rate in effect as of September 30, 2003. The prevailing rate as of November 21, 2003 was RMB8.2769 to US$1.00. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, the rates stated below, or at all. The Chinese government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade. The exchange rate from the U.S. dollar to RMB has fluctuated between a range of US$l.00 to RMB8.2272 and US$l.00 to RMB8.2769 between January 1, 1998 and November 21, 2003.

The following table sets forth information concerning exchange rates between the RMB and the U.S. dollar for the periods indicated. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this prospectus or will use in the preparation of our periodic reports or any other information to be provided to you. The source of these rates is the Federal Reserve Bank of New York.



			Noon Buying Rate

			Period
Period			End		Average(1)		Low		High


			(RMB per US$1.00)
1998				8.2789		8.3006		8.3180		8.2774
1999				8.2795		8.2783		8.2800		8.2770
2000				8.2774		8.2784		8.2799		8.2768
2001				8.2766		8.2770		8.2786		8.2676
2002				8.2800		8.2770		8.2800		8.2669
2003
	First Quarter			8.2774		8.2776		8.2800		8.2766
		April		8.2771		8.2772		8.2775		8.2768
		May		8.2768		8.2769		8.2771		8.2768
		June		8.2776		8.2771		8.2776		8.2768
		July		8.2774		8.2773		8.2776		8.2768
		August		8.2772		8.2747		8.2775		8.2272
		September		8.2771		8.2772		8.2775		8.2768
		October		8.2766		8.2768		8.2776		8.2765
		November (through November 21)		8.2769		8.2768		8.2770		8.2766


(1)	Annual averages are calculated from month-end rates. Monthly averages are calculated using the average of the daily rates during the relevant period.

ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated in the Cayman Islands because of the following benefits found there:


	•	political and economic stability;

	•	an effective judicial system;

	•	a favorable tax system;

	•	the absence of exchange control or currency restrictions; and

	•	the availability of professional and support services.

However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include:


	(1) the Cayman Islands has a less developed body of securities laws as compared to the United States and these securities laws provide significantly less protection to investors; and

	(2) Cayman Islands companies may not have standing to sue before the federal courts of the United States.

Our constituent documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.

A substantial portion of our current operations is conducted in China, and substantially all of our assets are located in China. We also conduct part of our operations in Hong Kong. We have appointed CT Corporation System, 111 Eighth Avenue, New York, NY 10011, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States. A majority of our directors and officers are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

Maples and Calder Asia, our counsel as to Cayman Islands law, Commerce & Finance Law Office, our counsel as to Chinese law, and Boughton Peterson Yang Anderson, our counsel as to Hong Kong law, have advised us, respectively, that there is uncertainty as to whether the courts of the Cayman Islands, China and Hong Kong, respectively, would:


	(1) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or

	(2) entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

Maples and Calder Asia has further advised us that a final and conclusive judgment in the federal or state courts of the United States under which a sum of money is payable, other than a sum payable in respect of taxes, fines, penalties or similar charges, may be subject to enforcement proceedings as a debt in the courts of the Cayman Islands under the common law doctrine of obligation.

Commerce & Finance Law Office has advised us further that the recognition and enforcement of foreign judgments are provided for under Chinese Civil Procedures Law. Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of Chinese Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions.

Boughton Peterson Yang Anderson, in association with Squire, Sanders and Dempsey, has further advised us that enforcement of a foreign judgment in Hong Kong is subject to the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) of the laws of Hong Kong, or the Ordinance, which provides that a final and conclusive judgment of a court specified in an order under the Ordinance against a Hong Kong company for a fixed sum of money and which is enforceable by execution in the specified jurisdiction (other than a sum payable in respect of taxes or like charges, fines or penalties, in respect of any legal proceedings) may be registered in Hong Kong in accordance with the Rules of the High Court of Hong Kong and the provisions of the Ordinance and upon registration would be enforceable in Hong Kong provided it is not subsequently set aside by the courts of Hong Kong. The United States is not a country specified in the orders passed under the Ordinance and therefore any judgment granted by a United States court would be enforceable in Hong Kong only if it is made the subject of a Hong Kong judgment. A final judgment from a court in the United States may be treated and sued upon in the courts of Hong Kong as a liquidated sum.

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following information with our consolidated financial statements and related notes, and “Management’s Discussion and Analysis and Results of Operations” included elsewhere in this prospectus.

The selected consolidated statement of operations data for the years ended December 31, 2001 and 2002 and the nine months ended September 30, 2003, and the consolidated balance sheet data as of December 31, 2001 and 2002 and September 30, 2003, are derived from our audited consolidated financial statements included elsewhere in this prospectus and should be read in conjunction with, and are qualified in their entirety by reference to, these financial statements and related notes. These consolidated financial statements have been audited by PricewaterhouseCoopers and were prepared in accordance with U.S. GAAP. The selected consolidated statement of operations data for the year ended December 31, 2000 and the nine months ended September 30, 2002, and the selected consolidated balance sheet data as of December 31, 2000 and September 30, 2002, are derived from our unaudited consolidated financial statements included elsewhere in this prospectus and should be read in conjunction with, and are qualified in their entirety by reference to, these unaudited consolidated financial statements and related notes. We have prepared the unaudited information on the basis as the audited consolidated financial statements, and have included, in our opinion, all adjustments, consisting only of normal and recurring adjustments that we consider necessary for a fair presentation of the financial information set forth in those statements. Although we commenced operations in June 1999, we have not included financial information for the six-month period ended December 31, 1999, as such information is not available on a comparative basis with the audited financial information included in this prospectus.



		Year Ended December 31,												Nine Months Ended September 30,

		2000			2001			2002			2002			2002			2003			2003

		RMB			RMB			RMB			US$(1)			RMB			RMB			US$(1)
		(unaudited)												(unaudited)

		(in thousands, except for share and per share data)
Selected Consolidated Statements of Operation Data:
Net revenues			6,453			43,984			100,049			12,087			68,809			105,717			12,772
Costs of services			(1,950	)		(7,940	)		(13,673	)		(1,652	)		(9,100	)		(14,447	)		(1,745	)

Gross profit			4,503			36,044			86,376			10,435			59,709			91,270			11,027
Operating expenses:
	Product development		(6,817	)		(7,759	)		(13,365	)		(1,615	)		(9,170	)		(13,254	)		(1,601	)
	Sales and marketing		(17,378	)		(30,360	)		(32,309	)		(3,902	)		(23,520	)		(28,401	)		(3,431	)
	General and administrative		(11,677	)		(14,814	)		(15,702	)		(1,897	)		(11,173	)		(12,433	)		(1,502	)
	Share-based compensation(2)		—			(22	)		(462	)		(56	)		(336	)		(1,031	)		(125	)
	Amortization of goodwill and other intangible assets		(371	)		(1,807	)		(353	)		(43	)		(265	)		(265	)		(32	)
	Other expenses incurred for joint venture companies		—			(934	)		(915	)		(111	)		(915	)		—			—

Total operating expenses			(36,243	)		(55,696	)		(63,106	)		(7,624	)		(45,379	)		(55,384	)		(6,691	)

Income (loss) from operations			(31,740	)		(19,652	)		23,270			2,811			14,330			35,886			4,336
Interest income and other			675			2,049			1,293			156			438			3,717			449
Income (loss) before income tax benefit (expense), minority interests and share of income (loss) of joint venture companies			(31,065	)		(17,603	)		24,563			2,967			14,768			39,603			4,785
Income tax benefit (expense)			7,088			2,342			(10,043	)		(1,213	)		(6,156	)		(10,966	)		(1,325	)
Minority interests			—			—			71			9			32			(18	)		(2	)
Share of income (loss) of joint venture companies			—			—			(398	)		(48	)		(188	)		573			69

Net income (loss) for the year			(23,977	)		(15,261	)		14,193			1,715			8,456			29,192			3,527
Earnings per Share Data:
Accretion for Series B preferred shares			(2,196	)		(14,316	)		(16,492	)		(1,993	)		(12,140	)		(12,366	)		(1,494	)
Dividends to holders of preferred shares			—			—			(16,762	)		(2,025	)		—			—			—
Dividends to holders of Series A and Series B preferred shares for spin-off of joint venture companies			—			—			—			—			—			(2,829	)		(342	)
Deemed dividends upon repurchase of preferred shares			—			—			—			—			—			(35,336	)		(4,269	)
Net loss attributable to ordinary shareholders			(26,173	)		(29,577	)		(19,061	)		(2,303	)		(3,684	)		(21,339	)		(2,578	)
Loss per share, basic and diluted			(3.03	)		(3.26	)		(2.00	)		(0.24	)		(0.39	)		(2.26	)		(0.27	)
Loss per ADS(3), basic and diluted			(6.06	)		(6.52	)		(4.00	)		(0.48	)		(0.78	)		(4.52	)		(0.54	)
Cash dividends per share(4)			—			—			1.11			0.14			—			—			—



		As of December 31,											As of September 30,

		2000		2001			2002			2002			2002			2003		2003

		RMB		RMB			RMB			US$(1)			RMB			RMB		US$(1)
		(unaudited)											(unaudited)

		(in thousands, except for share and per share data)
Consolidated Balance Sheet Data:
	Cash		88,908		42,464			38,931			4,703			61,488			70,353		8,500
	Other current assets		3,343		45,932			20,580			2,487			25,907			34,877		4,214
	Non-current assets		25,639		20,529			37,744			4,560			30,275			46,769		5,650
	Total assets		117,890		108,925			97,255			11,750			117,670			151,999		18,364
	Current liabilities		9,736		12,962			13,093			1,582			12,363			42,910		5,184
	Minority interests		—		—			828			100			512			57		7
	Series B preferred shares(5)		94,154		108,470			124,963			15,097			120,610			—		—
	Total shareholders’ equity (deficit)		14,000		(12,507	)		(41,629	)		(5,029	)		(15,815	)		109,032		13,173


(1)	Translations of RMB amounts into U.S. dollars were made at a rate of RMB8.2771 to U.S.$1.00. See “Exchange Rate Information.”

(2)	Share based compensation was related to the associated operating expense categories as follows:



	Year Ended December 31,								Nine Months Ended September 30,

	2000		2001		2002		2002		2002		2003		2003

	RMB		RMB		RMB		US$(1)		RMB		RMB		US$(1)
	(unaudited)								(unaudited)

	(in thousands, except for share and per share data)
Product and development		—		5		131		16		95		254		31
Sales and marketing		—		1		27		3		22		82		10
General administration		—		16		304		37		219		695		84

				22		462		56		336		1,031		125



(3)	Each ADS represents two ordinary shares.



(4)	The dividends recognized represent dividends totaling RMB27.3 million distributed out of our reserves in December 2002 to holders of ordinary shares, Series A preferred shares and Series B preferred shares on a pro rata as-converted basis. Dividends per share were calculated on the basis of 24,630,894 ordinary shares on an as-converted basis.


(5)	Prior to the forfeiture of the redemption feature in September 2003, Series B preferred shares were not included as part of shareholders’ equity as such shares were redeemable at the option of the holder. As of September 30, 2003, Series B preferred shares are included in total shareholders’ equity (deficit).

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in this prospectus.

Overview

We are a leading consolidator of hotel accommodations and airline tickets in China. We aggregate information on hotels and flights and enable our customers to make informed and cost-effective hotel and flight bookings. We also offer packaged-tour products and other travel-related products and services. For the nine months ended September 30, 2003, revenues from our hotel reservation, air-ticketing and other businesses accounted for 85.8%, 10.5% and 3.7%, respectively, of our revenues.

The major factors affecting our results of operations and financial condition include:


	•	growth in the Chinese economy and the travel industry;

	•	revenue composition and sources of revenue growth;

	•	costs of services;

	•	operating expenses;

	•	income taxes and tax rebates;

	•	accretion for our Series B preferred shares; and

	•	seasonality in the travel industry.

Each of these factors is discussed below.

Growth in the Chinese Economy and the Travel Industry. Our financial results have been, and are expected to continue to be, affected by the growth in the Chinese economy and travel industry. The Chinese economy has grown significantly in recent years, with its gross domestic product increasing from RMB7,835 billion in 1998 to RMB10,479 billion in 2002, representing a compound annual growth rate of 7.5%. This growth has led to a substantial increase in industrial and commercial activity and, in combination with an increase in personal disposable income and changes in consumption pattern, resulted in significant increase in the demand for travel services. The aggregate expenditure on tourism in China increased from RMB239.1 billion in 1998 to RMB387.8 billion in 2002, representing a compound annual growth rate of 12.8%. According to China’s tenth five-year plan, the Chinese government expects an approximately 7% compound annual growth rate of China’s gross domestic product from 2000 to 2005. We anticipate that demand for travel services in China will continue to increase substantially in the foreseeable future as the Chinese economy continues to grow.

Revenue Composition and Sources of Revenue Growth. We have experienced significant revenue growth since we commenced operations in 1999. Our revenues grew from RMB6.9 million in 2000 to RMB46.4 million in 2001 and to RMB105.3 million in 2002. Our revenues for the nine months ended September 30, 2003 were RMB111.3 million.

We generate our revenues primarily from the hotel reservation and air-ticketing businesses. The table below sets forth the revenues from our principal lines of business as a percentage of our revenues for the periods indicated.



											Nine Months Ended
		Year Ended December 31,									September 30,

		2000			2001			2002			2002			2003

		(unaudited)									(unaudited)
Revenues:
	Hotel reservation		77.3	%		93.5	%		91.9	%		92.8	%		85.8	%
	Air-ticketing		12.2			4.0			5.3			4.6			10.5
	Packaged-tour		4.5			1.3			0.4			0.5			1.6
	Others		6.0			1.2			2.4			2.1			2.1

Total revenues			100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

As we generally do not take ownership of the products and services being sold and act as agent in substantially all of our transactions, our risk of loss due to obligations for cancelled hotel and airline ticket reservations is minimal. Accordingly, we recognize revenues based on commissions earned rather than transaction value.

Because current Chinese laws and regulations impose substantial restrictions on foreign ownership of the air-ticketing, travel agency, advertising and Internet content provision businesses in China, we conduct part of our air-ticketing and packaged-tour businesses through our affiliated Chinese entities. Historically, we generated less than 5% of our revenues from fees charged to these entities. See “— Affiliated Chinese Entities” for a description of our relationship with such entities.

Hotel Reservation. Revenues from our hotel reservation business have been our primary source of revenue since our inception. In 2000, 2001, 2002 and the nine months ended September 30, 2003, revenues from our hotel reservation business accounted for RMB5.3 million, RMB43.4 million, RMB96.8 million (US$11.7 million) and RMB95.5 million (US$11.5 million), respectively, or 77.3%, 93.5%, 91.9% and 85.8%, respectively, of our revenues.

We derive our hotel reservation revenues through commissions from hotels, primarily based on the room rates paid by our customers. We recognize revenue when we receive confirmation from a hotel that a customer who booked the hotel through us has checked into the hotel. While we generally agree in advance on fixed commissions with a particular hotel, we also enter into a commission arrangement with many of our hotel suppliers that we refer to as the “ratchet system.” Under the ratchet system, our commission per room night for a given hotel increases for the month if we sell in excess of a pre-agreed number of room nights with such hotel within the month. We believe that absent extraordinary events such as SARS, revenue from our hotel reservation business will continue to experience substantial growth on an annual basis.

Air-Ticketing. Since early 2002, the air-ticketing business has been our fastest-growing source of revenues. In 2000, 2001, 2002 and the nine months ended September 30, 2003, revenues from the air-ticketing business accounted for RMB0.8 million, RMB1.8 million, RMB5.6 million (US$0.7 million) and RMB11.6 million (US$1.4 million), respectively, or 12.2%, 4.0%, 5.3% and 10.5%, respectively, of our revenues.

We conduct our air-ticketing business through Beijing Chenhao and Shanghai Huacheng, both of which are our affiliated entities, as well as a network of independent air-ticketing service companies. Currently, we recognize revenue when a ticket is issued and delivered by Beijing Chenhao and Shanghai Huacheng. Prior to July 1, 2003, when we charged Beijing Chenhao or Shanghai Huacheng in accordance with our contractual arrangements with them, we recognized the amount of such charge as revenue from our air-ticketing business. We receive a higher commission per ticket from some airlines if the volume of tickets we sell for such airline reaches certain performance targets. In addition, since the commission rate per ticket for international flights is generally higher than that for domestic flights in China, we intend to sell more tickets for international flights.

Packaged-tour. Currently, we conduct our packaged-tour business mainly through Shanghai Huacheng. Currently, we generally recognize revenue when a customer completes the packaged tour. Prior to

July 1, 2003, however, when we charged Shanghai Huacheng in accordance with our contractual arrangements with it, we recognized the amount of such charge as revenue from our packaged tour business. We expect that our revenues from the packaged-tour business will grow as a result of our increased promotion of packaged-tour products and our acquisition of Shanghai Cuiming.

Other Businesses. Our other business lines comprise advertising services and sales of our VIP membership cards. We place our customers’ advertisements on our websites and in our introductory brochures. We sell VIP membership cards that allow cardholders to receive discounts from some restaurants, clubs and bars and certain priority in receiving our services. We currently conduct the advertising business through Ctrip Commerce, and we recognize revenue when Ctrip Commerce renders advertising services. Prior to July 1, 2003, however, we recognized our advertising revenue when we charged Ctrip Commerce in accordance with our contractual arrangements with it. We recognize revenue from sales of our VIP membership cards when they are sold to customers. We expect that revenues from these other businesses will continue to contribute an insignificant percentage of our revenues in the near future.

Costs of Services. Costs of services are costs directly attributable to rendering our revenues, which consist primarily of payroll compensation, telecommunication expenses and other direct expenses incurred in connection with our transaction and service platform. Payroll compensation accounted for 33.6%, 43.1%, 57.0% and 59.5% of our costs of services in 2000, 2001, 2002 and the nine months ended September 30, 2003, respectively. Telecommunication expenses accounted for 31.9%, 42.3%, 30.5% and 27.1% of our costs of services in 2000, 2001, 2002 and the nine months ended September 30, 2003, respectively.

Costs of services accounted for 30.2%, 18.1%, 13.7% and 13.7% of our net revenues in 2000, 2001, 2002 and the nine months ended September 30, 2003, respectively. We believe our relatively low ratio of costs of services to revenues is primarily due to competitive labor costs in China and relatively high efficiency of our customer service system. The average compensation of our customer service representatives at our toll-free, 24-hour transaction and service center in October 2003 was RMB2,791 (US$337), consisting of an average fixed pay of RMB1,551 (US$187) plus commissions based on the number of transactions completed during the month. In October 2003, each of our customer service representatives received approximately 2,425 calls on average. Therefore, the average labor cost per call in October 2003 was approximately RMB1.15 (US$0.14). Our cost efficiency was further enhanced by our website operations, which require significantly fewer service staff to operate and maintain. We believe our costs of services will continue to account for a relatively small percentage of our net revenues for the foreseeable future.

Operating Expenses. Operating expenses consist primarily of product development expenses, sales and marketing expenses, general and administration expenses and share-based compensation.

Product development expenses primarily include expenses we incur to develop our travel suppliers network and electronic confirmation system, as well as expenses we incur to develop, maintain and monitor our transaction and service platform, including our travel booking system. In the past, we incurred relatively high product development costs as a percentage of net revenues to develop the supplier network and infrastructure necessary to support our business. As we have established the platform that we believe can keep up with the expected growth in our transaction volume without substantial incremental costs for redesign, we do not expect that our product development expenses will increase significantly as a percentage of net revenues for the foreseeable future.

Sales and marketing expenses primarily comprise payroll compensation and benefits for our sales and marketing personnel, advertising expenses, commissions for our marketing partners for referring customers to us, production costs of marketing materials and membership cards and expenses associated with our membership reward program. Our sales and marketing expenses as a percentage of net revenues have declined due to our more effective and focused marketing efforts. As we continue to pursue our targeted marketing strategy, we expect that our sales and marketing expenses will remain relatively steady as a percentage of net revenues for the foreseeable future.

General and administrative expenses consist primarily of payroll compensation, benefits and travel expenses for our administrative staff, as well as administrative office expenses. General and administrative

expenses as a percentage of net revenues have remained largely unchanged. We expect that our general and administrative expenses will increase after the closing of this offering due to the various additional legal, accounting and other requirements applicable to a public company listed in the United States. However, given our expected increased revenues, we do not expect our general and administrative expenses to increase substantially as a percentage of our net revenues.

Share-based compensation is the difference, if any, between the estimated fair value of our ordinary shares and the amount an employee is required to pay to acquire the shares, as determined on the date the share option is granted. We amortize share-based compensation and charge it to expense over the three-year vesting period of the underlying options. Subsequent to September 30, 2003, we granted 268,980 options to certain directors, senior executives and employees. See “Management — Employees’ Stock Option Plans.” We do not believe that future compensation expense related to these options will have a material impact on our consolidated financial statements.

Income Taxes. Companies in China are generally subject to a 30% state enterprise income tax and a 3% local income tax. One of our subsidiaries in China, Ctrip Computer Technology, obtained approval from the Chinese government authorities to be entitled to a reduced 15% state enterprise income tax rate in November 2003 because it is classified as a “new high-technology enterprise.” Another Chinese subsidiary, Ctrip Travel Information, is entitled to a reduced 15% state enterprise income tax rate because it was incorporated in Pudong New District, Shanghai.

Financial Subsidies. In 2002 and the nine months ended September 30, 2003, our subsidiaries in China received business tax rebates in the form of financial subsidies from the government authorities in Shanghai in the amount of RMB783,900 (US$94,707) and RMB2,431,500 (US$293,762), respectively, which we recorded as other income. We cannot assure you, however, that our subsidiaries will continue to receive such business tax rebates or other financial subsidies in the future.

Accretion for Series B Preferred Shares. Prior to September 4, 2003, holders of our Series B mandatorily redeemable convertible preferred shares, or Series B preferred shares, had the right to request that we redeem all of their Series B preferred shares at US$3.13334 per share plus any declared but unpaid dividends commencing November 2005. Accordingly, the Series B preferred shares have been accreted to the estimated redemption value through periodic charges to accumulated deficit or additional paid-in-capital, as appropriate. Charges with respect to our Series B preferred shares totaled RMB2.2 million, RMB14.3 million, RMB16.5 million (US$2.0 million) and RMB12.4 million (US$1.5 million) for 2000, 2001, 2002 and the nine months ended September 30, 2003, respectively.

Holders of our Series B preferred shares have agreed to extinguish their redemption right effective as of September 4, 2003 in connection with the issuance and sale of our Series C convertible preferred shares. Therefore, we have not incurred any additional accretion for Series B preferred shares since September 4, 2003.

Seasonality in the Travel Industry. The travel industry is generally characterized by seasonal fluctuations. However, as we are still in the high growth phase, the rate of our revenue growth has offset any impact caused by the seasonal nature of the travel industry. The third quarter of each year generally contributes the highest portion of our annual net revenues, mainly because it coincides with the peak business and leisure travel season. The first quarter of each year generally contributes the lowest portion of our annual net revenues primarily due to less business activity and the Chinese new year holiday.

Individual travelers tend to curtail travel due to trends or events that include the outbreak of serious contagious diseases such as SARS, increased occurrence of travel-related accidents, bad weather or natural disasters, general economic downturns and increased prices in the hotel, airline or other travel-related industries. During the period from March 2003 through June 2003, several economies in Asia, including Hong Kong and China, were severely affected by the outbreak of SARS. Although none of our employees was infected with SARS, our business and operating results were adversely affected. Total room nights booked through us decreased from over 131,000 and over 122,000 in May and June 2002, respectively, to over 36,000 and over 109,000 in May and June 2003, respectively.

Except for the SARS period, we have not experienced any decline in our quarterly revenues. If the growth of our business slows down in the future, our revenue may vary from quarter to quarter in line with the seasonality of the travel industry.

Quarterly Results of Operations

The following table presents our unaudited quarterly results of operations for the nine quarters in the period ended September 30, 2003. You should read the following table in conjunction with the consolidated financial statements and related notes contained elsewhere in this prospectus. We have prepared the unaudited information on the same basis as our audited consolidated financial statements. This information includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for fair presentation of our financial position and operating results for the quarters presented. Operating results for any quarter are not necessarily indicative of results for any future quarters or for a full year.



		Three Months Ended (unaudited)

		September 30,			December 31,			March 31,			June 30,			September 30,			December 31,			March 31,			June 30,			September 30,
		2001			2001			2002			2002			2002			2002			2003			2003			2003


		(in RMB thousands, except percentages and non-financial data)
Revenues:
	Hotel reservation		13,502			15,809			16,834			23,147			27,240			29,541			30,250			16,571			48,707
	Air-ticketing		504			518			697			976			1,670			2,257			2,413			2,393			6,842
	Packaged-tour		75			115			152			127			111			42			140			—			1,595
	Others		68			184			279			499			706			1,034			814			639			962

Total revenues			14,149			16,626			17,962			24,749			29,727			32,874			33,617			19,603			58,106

Less: business tax and related surcharges			(714	)		(841	)		(915	)		(1,233	)		(1,481	)		(1,635	)		(1,667	)		(973	)		(2,969	)

Net revenues			13,435			15,785			17,047			23,516			28,246			31,239			31,950			18,630			55,137

Cost of services			(2,306	)		(2,516	)		(2,608	)		(3,226	)		(3,267	)		(4,572	)		(4,210	)		(3,754	)		(6,483	)

Gross profit			11,129			13,269			14,439			20,290			24,979			26,667			27,740			14,876			48,654

Gross margin			83%			84%			85%			86%			88%			85%			87%			80%			88%
Operating Expenses:
	Product development		(1,994	)		(1,821	)		(2,619	)		(3,173	)		(3,380	)		(4,194	)		(4,436	)		(3,807	)		(5,011	)
	Sales and marketing		(9,601	)		(8,579	)		(6,478	)		(8,181	)		(8,861	)		(8,788	)		(8,794	)		(7,725	)		(11,882	)
	General administrative		(3,706	)		(3,664	)		(3,666	)		(3,889	)		(3,618	)		(4,529	)		(4,225	)		(3,712	)		(4,496	)
	Share-based compensation		(9	)		(10	)		(115	)		(131	)		(89	)		(127	)		(219	)		(399	)		(414	)
	Amortization of goodwill and other intangible assets		(485	)		(352	)		(88	)		(88	)		(88	)		(88	)		(88	)		(88	)		(88	)
	Other expenses incurred for joint venture companies (Home Inns)		(341	)		(594	)		(634	)		(281	)		—			—			—			—			—

Total operating expenses			(16,136	)		(15,020	)		(13,600	)		(15,743	)		(16,036	)		(17,726	)		(17,762	)		(15,731	)		(21,891	)

Income (loss) from operations			(5,007	)		(1,751	)		839			4,547			8,943			8,941			9,978			(855	)		26,763

Operating margin			—			—			5%			19%			32%			29%			31%			—			49%
	Number of room nights booked (in thousands)		234.3			262.1			273.8			374.4			438.8			467.7			486.0			280.5			747.8
	Number of airline tickets booked (in thousands)		—	*		—	*		—	*		—	*		—	*		79.3			111.7			74.4			183.1


*	Meaningful information concerning the number of airline tickets booked during these periods is not available.

Our quarterly net revenues have experienced continued growth since the third quarter of 2001, except for the second quarter of 2003 during which our revenues were materially adversely affected by the SARS outbreak. The growth was in line with the increase in the number of room nights and airline tickets booked during the quarterly periods presented. It was primarily attributable to the continued increase in revenues from our hotel reservation and air-ticketing businesses. Our gross margin has remained at or above 80% throughout the past nine quarters, primarily due to competitive labor costs in China and relatively high efficiency of our customer service system. The growth in our quarterly operating income has generally offset any negative impact caused by the seasonality of the travel industry, except for the SARS period. During the second quarter of 2003, we received financial subsidies of RMB2,431,500 (US$293,762) from the government authorities in Shanghai. As a result, our quarterly operating loss for the second quarter of 2003 due to the SARS outbreak was offset by these financial subsidies.

Our gross profit and income from operations for the quarter ended September 30, 2003 have increased substantially compared to each of the preceding quarters. This increase is principally attributable to (i) the prompt and sharp rebound of the travel industry in China following a three-month travel downturn during the SARS period, (ii) the broader recognition of our Ctrip brand name, and (iii) the efficiency of our established transaction and service platform.

Affiliated Chinese Entities

Due to the current restrictions on foreign ownership of the air-ticketing, travel agency, advertising and Internet content provision businesses in China, we conduct part of our non-hotel reservation businesses through our affiliated Chinese entities. We have entered into consulting and service agreements with each of these entities whereby we provide technical support and other services to them in exchange for service fees from them. In addition, we have also entered into other agreements with them designed to give us control over their operations and secure payment of service fees from them, including share pledge agreements, powers of attorney and operating agreements. Pursuant to the share pledge agreements, Qi Ji, Min Fan and Alex Nanyan Zheng pledge their respective equity interests in our affiliated entities as a guarantee for the payment by these entities of service fees to us. As a result, in the event that any of our affiliated entities breaches any of its obligations under the service agreement with us, we are entitled to (i) sell the equity interests held by Qi Ji, Min Fan and/or Alex Nanyan Zheng, as the case may be, and retain the proceeds from such sale, or (ii) require any of them to transfer his equity interest without consideration to the Chinese citizen(s) designated by us. In addition, Qi Ji, Min Fan and Alex Nanyan Zheng have each executed an irrevocable power of attorney to appoint our President and Chief Financial Officer, Neil Nanpeng Shen, as attorney-in-fact to vote on all matters on which shareholders of our affiliated entities are entitled to vote, including matters relating to the appointment of the chief executive officers of our affiliated entities. Furthermore, pursuant to the operating agreements, our affiliated entities and their shareholders have agreed not to enter into any transaction that would affect the assets, obligations, rights or operations of such entities without our prior written consent. They also agree to accept our guidance with respect to their day-to-day operations, financial management systems and the appointment and dismissal of key employees. Through these arrangements, we have been able to effectively control the management and operations of our affiliated entities.

We hold no ownership interest in any of our affiliated entities. The ultimate principal shareholders of Beijing Chenhao, Shanghai Huacheng and Guangzhou Guangcheng are Qi Ji, who is our co-founder and director, Min Fan, who is our co-founder and executive vice president, and Alex Nanyan Zheng, who is our vice president. Qi Ji and Min Fan own 80% and 20%, respectively, of Beijing Chenhao. Qi Ji and Min Fan own 51% and 49%, respectively, of Ctrip Commerce, and Ctrip Commerce owns 90% of Shanghai Huacheng. Min Fan and Alex Nanyan Zheng own 90% and 10%, respectively, of Guangzhou Guangcheng. We have made loans to Qi Ji, Min Fan and Alex Nanyan Zheng solely in connection with the capitalization or acquisition of our affiliated entities. See “Related Party Transactions — Arrangements with Affiliated Chinese Entities.”

Prior to July 1, 2003, we did not consolidate the financial results of our affiliated Chinese entities. Instead, according to the service agreements then in effect, we earned part of our air-ticketing and packaged-

tour revenues from Beijing Chenhao and Shanghai Huacheng by charging fees for services we rendered to them, including consulting, technology, administrative, marketing and other services. We issued invoices to Beijing Chenhao and Shanghai Huacheng on a monthly basis based on the amount of service fees determined in our sole discretion. We recognized our air-ticketing or packaged-tour revenue when we performed the services to the applicable entity. Historically, we generated less than 5% of our revenues from service fees charged to our affiliated entities. Since July 1, 2003, as required by FIN 46, a new accounting standard, we began to consolidate the financial results of our affiliated Chinese entities. See “— Recent Accounting Pronouncements.” As a result of this change in accounting policy, our results of operations attributable to our affiliated entities are not reflected in our results of operations for the nine months ended September 30, 2003 on the same basis as our results of operations for the same period in 2002. We believe, however, that the application of this change in accounting policy is not material to our financial statements.

Acquisition of Shanghai Cuiming

In order to expand our cross-border packaged-tour business, we recently acquired an effective controlling stake in Shanghai Cuiming, which holds a license to conduct both cross-border and domestic packaged-tour businesses. As part of our acquisition, Min Fan, our co-founder and executive vice president, entered into a share purchase agreement with the shareholders of Shanghai Cuiming in August 2003, pursuant to which Min Fan agreed to pay RMB2.0 million (US$0.2 million) to acquire a 66% ownership interest in Shanghai Cuiming. We made an interest-free loan to Min Fan in a principal amount of RMB4.3 million (US$0.5 million) in connection with the acquisition and expected increase in the capital of Shanghai Cuiming. We have entered into contractual arrangements with Shanghai Cuiming and Min Fan that contain substantially similar terms as our arrangements with our other affiliated Chinese entities. See “Related Party Transactions — Arrangements with Affiliated Chinese Entities.” The acquisition of Shanghai Cuiming does not have a material effect on our consolidated financial condition and result of operations.

Critical Accounting Policies

We prepare financial statements in conformity with U.S. GAAP, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the financial reporting period. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We consider the policies discussed below to be critical to an understanding of our financial statements as their application places the most significant demands on management’s judgment.

Revenue Recognition. We describe our revenue recognition polices in Note 2 to our consolidated financial statements included elsewhere in this prospectus. In considering Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and Emerging Issues Task Force 99-19 “Reporting Revenue Gross as a Principal versus Net as an Agent,” we believe that our policies for revenue recognition and presentation of statement of operations are appropriate. The factors we have considered include whether we are able to achieve the pre-determined specific performance targets by travel suppliers for recognition of the incentive commissions in addition to the fixed-rate and our risk of loss due to obligations for cancelled hotel and airline ticket reservations. As we operate primarily as agent to the travel suppliers and our risk of loss due to obligations for cancelled hotel and airline ticket reservations is minimum, we recognize commissions on a net basis.

Goodwill, Intangible Assets and Long-Lived Assets. In addition to the original cost of goodwill, intangible assets and long-lived assets, the recorded value of these assets is impacted by a number of policy elections, including estimated useful lives, residual values and impairment charges. Statement of Financial Accounting Standards No. 142 provides that intangible assets that have indefinite useful lives and goodwill

will not be amortized but rather will be tested at least annually for impairment. Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets” requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable from its undiscounted future cash flow. For each of 2000, 2001, 2002 and the nine months ended September 30, 2003, we did not recognize any impairment charges for goodwill, intangible assets or long-lived assets. If different judgments or estimates had been utilized, material differences could have resulted in the amount and timing of the impairment charge.

Customer Reward Program. We have a customer reward program as described in Note 2 to our consolidated financial statements included elsewhere in this prospectus. Provisions of the customer reward program allow customers to receive travel awards and other gifts based on accumulated membership points that vary depending on the products and services purchased by the customers. Because we have an obligation to provide such travel awards and other gifts, we recognize a liability and corresponding expense for the related future obligations. As of December 31, 2000, 2001 and 2002 and September 30, 2003, our provisions for the customer reward program were RMB109,762, RMB911,526, RMB2,297,403 (US$277,561) and RMB3,470,457 (US$419,284), respectively. We estimate our liabilities under our customer reward program based on accumulated membership points and our estimate of probability of redemption. If actual redemption differs significantly from our estimate, it will result in an adjustment to our liability and the corresponding expense. If our estimate of the probability of redemption increases by 10%, the obligation related to our customer reward program would increase by approximately RMB347,000 (US$41,923).

Share-Based Compensation. We have share option plans to grant stock options to officers, directors, and employees of our company. We account for these plans under Accounting Principles Board Opinion No. 25, the intrinsic value approach, with the required disclosures under the related accounting guidance described in Note 2 to our consolidated financial statements included elsewhere in this prospectus. For 2001, 2002 and the nine months ended September 30, 2003, we recognized share-based compensation under the share option plans in the amounts of nil, RMB21,950, RMB462,140 (US$55,834) and RMB1.03 million (US$124,541), respectively. While we believe that the share-based compensation we recognized for the plans under Accounting Principles Board Opinion No. 25 is appropriate, changes in our assumptions, including estimated fair value of our ordinary shares, will result in an adjustment to our deferred share-based compensation and the corresponding share-based compensation.

Loans to a Director and Officers. We make certain long-term loans to a director and two senior executives of our company for the purpose of establishing and/or acquiring several affiliated Chinese entities, which are used to facilitate our air-ticketing, packaged tour, Internet content provision and advertising services, where foreign ownership is restricted. To the extent losses are incurred by these affiliated entities, we accrue for such losses by recording valuation allowances against the long-term loans to the director and senior executives. For 2000, 2001, 2002 and the nine months ended September 30, 2003, we did not record any valuation allowances for losses incurred by our affiliated Chinese entities. To the extent that the Chinese regulations change or the business conditions of these affiliated entities deteriorate, valuation allowances may be required. For more information about these loans, see “Related Party Transactions — Arrangements with Affiliated Chinese Entities.”

Deferred Tax Valuation Allowances. We have not recorded any valuation allowances to reduce our deferred tax assets, as we believe that our deferred tax asset amounts are more than likely to be realized based on our estimate of future taxable income and prudent and feasible tax planning strategies. As of December 31, 2000, 2001 and 2002 and September 30, 2003, we recorded deferred tax assets of RMB7,496,080, RMB9,837,979, RMB593,143 (US$71,661) and RMB684,155 (US$82,656), respectively. In 2002, we utilized deferred tax assets of RMB9,244,836 (US$1,116,917) accumulated from our operations during prior years, primarily relating to net operating losses carry-forwards. If, however, unexpected events occur in the future that would prevent us from realizing all or a portion of our net deferred tax assets, an adjustment would result in a charge to income in the period in which such determination was made.

Results of Operations

The following table sets forth a summary of our consolidated statements of operations as a percentage of net revenues for the periods indicated.



											Nine Months Ended
		Year Ended December 31,									September 30,

		2000			2001			2002			2002			2003

		(unaudited)									(unaudited)
Revenues:
	Hotel reservation		82.7	%		98.6	%		96.7	%		97.7	%		90.4	%
	Airline ticketing		13.1	%		4.2	%		5.6	%		4.9	%		11.0	%
	Packaged tour		4.8	%		1.4	%		0.4	%		0.6	%		1.6	%
	Others		6.4	%		1.3	%		2.5	%		2.1	%		2.3	%
Less: Business tax and related surcharges			(7.0	)%		(5.5	)%		(5.2	)%		(5.3	)%		(5.3	)%

Net revenues			100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Cost of services			(30.2	)%		(18.1	)%		(13.7	)%		(13.2	)%		(13.7	)%

Gross profit			69.8	%		81.9	%		86.3	%		86.8	%		86.3	%
Operating expenses:
	Product development		(105.6	)%		(17.6	)%		(13.4	)%		(13.3	)%		(12.5	)%
	Sales and marketing		(269.3	)%		(69.0	)%		(32.2	)%		(34.2	)%		(26.9	)%
	General and administrative		(181.1	)%		(33.7	)%		(15.7	)%		(16.2	)%		(11.8	)%
	Share-based compensation		—			(0.1	)%		(0.5	)%		(0.5	)%		(1.0	)%
	Amortization of goodwill and other intangible assets		(5.7	)%		(4.1	)%		(0.3	)%		(0.4	)%		(0.2	)%
	Other expenses incurred for joint venture companies		—			(2.1	)%		(0.9	)%		(1.3	)%		—

Total operating expenses			(561.7	)%		(126.6	)%		(63.0	)%		(65.9	)%		(52.4	)%

Income (Loss) from operations			(491.9	)%		(44.7	)%		23.3	%		20.8	%		33.9	%

Interest income			11.4	%		5.0	%		0.3	%		0.3	%		0.2	%
Interest expense on short-term bank loan			—			(0.1	)%		0.0	%		0.0	%		—
Other income (expense)			(0.9	)%		(0.2	)%		1.0	%		0.4	%		3.4	%

Income (Loss) before income tax benefit (expense), minority interests and share of loss in joint venture companies			(481.4	)%		(40.0	)%		24.6	%		21.5	%		37.5	%

Income tax benefit (expense)			109.8	%		5.3	%		(10.0	)%		(8.9	)%		(10.4	)%
Minority interests			—			—			0.0	%		0.0	%		0.0	%
Share of income (loss) of joint venture companies			—			—			(0.4	)%		(0.3	)%		0.5	%

Net income (loss) for the period			(371.6	)%		(34.7	)%		14.2	%		12.3	%		27.6	%

Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30, 2002

Revenues. We generated revenues of RMB111.3 million (US$13.5 million) in the nine months ended September 30, 2003, an increase of 53.7% from RMB72.4 million in the same period in 2002. Although we were adversely affected by the outbreak of SARS in the second quarter of 2003, we were able to achieve increased revenues in the nine months ended September 30, 2003 due to increases in revenues from our hotel reservation and air-ticketing businesses.

Hotel Reservation. For the nine months ended September 30, 2003, revenues from our hotel reservation business increased by 42.1% to RMB95.5 million (US$11.5 million) from RMB67.2 million in the same period in 2002, primarily because of our growing customer base and increased booking of hotel rooms. Although revenue growth in our hotel reservation business in the nine months ended September 30, 2003 was adversely affected by the outbreak of SARS in the second quarter in 2003, our hotel room sales volume increased substantially in the third quarter of 2003, after the SARS outbreak ended.

Air-ticketing. For the nine months ended September 30, 2003, revenues generated from our air-ticketing business increased substantially to RMB11.6 million (US$1.4 million) from RMB3.3 million in the same period in 2002, due to our increased efforts to expand our air-ticketing business and establish relationships with more air-ticketing service companies, offset in part by the impact of SARS.

Packaged-tour. Packaged-tour revenues for the nine months ended September 30, 2003 increased substantially to RMB1.7 million (US$0.2 million) from RMB390,215 in the same period in 2002. This increase was due to our increased efforts to expand our packaged-tour business by leveraging our existing customer base and offering more packaged-tour products.

Other Businesses. For the nine months ended September 30, 2003, revenues from our other businesses increased by 62.8% to RMB2.4 million (US$0.3 million) from RMB1.5 million in the same period in 2002, due to the increased sales of our advertising services and VIP membership cards.

Net Revenues. Our net revenues are derived by subtracting business tax and related surcharges from our revenues. Our net revenues increased by 53.6% from RMB68.8 million in the nine months ended September 30, 2002 to RMB105.7 million (US$12.8 million) in the nine months ended September 30, 2003, as a result of our increased revenues, partially offset by the resulting increase in business tax and related surcharges over the same periods.

Costs of Services. Costs of services for the nine months ended September 30, 2003 increased by 58.8% to RMB14.4 million (US$1.7 million) from RMB9.1 million for the same period in 2002. The increase in costs of services was primarily due to increased salary and benefits largely resulting from the hiring of additional customer service center representatives as well as increased telecommunication expenses resulting from the higher utilization rate of our customer service center.

Our costs of services increased at a higher percentage rate than our net revenues, principally due to the outbreak of SARS. Since we viewed SARS as an event of limited long-term significance, we maintained substantially the same level of staff. To mitigate the impact of SARS, however, we adopted measures to reduce our costs, including unpaid leave for our employees. At the same time, our significantly lower transaction volume reduced our telecommunication expenses, due to lower incoming and outgoing calls, and our salary and benefits, since the compensation of our customer service agents is linked to the number of completed transactions. Notwithstanding these cost-reduction efforts, our costs of services did not decline enough to offset the impact of SARS on our net revenues.

Operating Expenses. Operating expenses in the nine months ended September 30, 2003 increased to RMB55.4 million (US$6.7 million), or 22.0% from RMB45.4 million for the same period in 2002, primarily due to increased product development and sales and marketing expenses. Operating expenses as a percentage of net revenues decreased to 52.4% in the nine months ended September 30, 2003 from 65.9% for the same period in 2002.

Product Development. Product development expenses increased by 44.5% to RMB13.3 million (US$1.6 million) in the nine months ended September 30, 2003 from RMB9.2 million for the same period in 2002, primarily due to the hiring of additional personnel to expand our travel suppliers network.

Sales and Marketing. Sales and marketing expenses increased by 20.8% to RMB28.4 million (US$3.4 million) in the nine months ended September 30, 2003 from RMB23.5 million for the same period in 2002, primarily because of increased expenses incurred in connection with our customer reward program, increased salary and benefit expenses for sales and marketing staff, production of marketing materials and membership cards, as well as increased commissions to our marketing partners for referring customers to us.

General and Administrative. General and administrative expenses increased by 11.3% to RMB12.4 million (US$1.5 million) in the nine months ended September 30, 2003 from RMB11.2 million for the same period in 2002.

Share-Based Compensation. Share-based compensation increased substantially to RMB1.0 million (US$0.1 million) in the nine months ended September 30, 2003 compared to RMB336,127 for the same period in 2002, due to the issuance of additional share options under our 2000 and 2003 stock option plans in the nine months ended September 30, 2003.

Amortization of Goodwill and Other Intangible Assets. Amortization expenses remained stable at RMB264,931 (US$32,008) in the nine months ended September 30, 2003, primarily representing the continuing amortization of a customer list arising from our acquisition of Beijing Modern Express.

Other Expenses Incurred for Joint Venture Companies. We incurred no expenses for joint venture companies in the nine months ended September 30, 2003, but incurred expenses of RMB915,056 over the same period in 2002, because Home Inns and Hotels Management (Beijing) Limited, a joint venture subsidiary of Home Inns, began to bear its own expenses after its establishment in the second half of 2002.

Interest Income and Expenses. Interest income increased to RMB242,577 (US$29,307) in the nine months ended September 30, 2003 from RMB216,972 in the same period in 2002 because of the increase in our bank deposits. Interest expense decreased to zero in the nine months ended September 30, 2003 from RMB41,261 (US$4,985) for the same period in 2002, because we repaid our bank loan in early 2002.

Other Income. Other income increased substantially to RMB3.5 million (US$0.4 million) in the nine months ended September 30, 2003 from RMB263,044 in the same period in 2002, because we received financial subsidies totaling RMB3,354,450 (US$405,269), RMB922,950 (US$111,506) of which were granted for entities impacted by SARS from the government authorities in Shanghai in 2003.

Income Tax Expense. Income tax expense for the nine months ended September 30, 2003 increased by 78.2% to RMB11.0 million (US$1.3 million) from RMB6.2 million for the nine months ended September 30, 2002, primarily because of the increase of our taxable income.

Net Income. Net income increased by 245.2% to RMB29.2 million (US$3.5 million) in the nine months ended September 30, 2003 from RMB8.5 million for the same period in 2002, primarily due to an increase in income from operations, offset in part by the negative impact of the outbreak of SARS.

2002 Compared to 2001

Revenues. We had revenues of RMB105.3 million (US$12.7 million) in 2002, an increase of 127.1% over RMB46.4 million in 2001. This revenue growth was principally the result of the expansion of our hotel reservation business, supplemented by the growth in our air-ticketing business.

Hotel Reservation. Revenues from our hotel reservation business increased substantially by 123.1% to RMB96.8 million (US$11.7 million) in 2002 from RMB43.4 million in 2001, primarily as a result of the continued rapid increase in our hotel room sales volume and the “ratchet system” commission arrangement with many of our hotel suppliers.

Air-ticketing. Revenues from our air-ticketing business increased substantially by 205.7% to RMB5.6 million (US$0.7 million) in 2002 from RMB1.8 million in 2001, primarily due to our efforts to expand the customer base for our air-ticketing business in 2002, including the enhancement of our fulfillment channel under various service agreements with third parties and Beijing Chenhao, and the acquisition of the air-ticketing business of Beijing Hai’an Air-ticketing Agency.

Packaged-tour. Packaged-tour revenues decreased by 27.3% to RMB432,295 (US$52,228) in 2002 compared to RMB594,802 in 2001, primarily because of our decision to reduce the amount of consulting fees that we charged to Shanghai Huacheng to enable Shanghai Huacheng to fund its operating requirements.

Other Businesses. Revenues from our other businesses increased substantially to RMB2,517,316 (US$304,130) in 2002 from RMB576,075 in 2001, primarily due to the increased sales of our advertising services and VIP membership cards in 2002.

Net Revenues. Our net revenues increased from RMB44.0 million in 2001 to RMB100.0 million (US$12.1 million) in 2002 as a result of our increased revenues, partially offset by the resulting increase in business tax and related surcharges over the same periods.

Costs of Services. Costs of services in 2002 increased by 72.2% to RMB13.7 million (US$1.7 million) from RMB7.9 million in 2001. The increase in our costs of services was primarily attributable to the hiring of additional customer service representatives as well as increased telecommunication expenses resulting from the overall expansion of our hotel reservation and air-ticketing businesses.

Operating Expenses. Operating expenses in 2002 increased to RMB63.1 million (US$7.6 million), or 13.3% over RMB55.7 million in 2001, primarily due to a significant increase in product development expenses and a slight increase in sales and marketing expenses, partially offset by amortization of goodwill and other intangible assets. Operating expenses as a percentage of net revenues decreased to 63.0% in 2002 from 126.6% in 2001, because our revenues increased substantially while our established transaction and service platform was able to keep up with the increased transaction volume without the need to incur expenses at a rate similar to our revenue growth.

Product Development. Product development expenses increased by 72.2% to RMB13.4 million (US$1.6 million) in 2002 from RMB7.8 million in 2001, primarily due to the hiring of additional staff to expand our travel supplier network and additional technical support staff and the related increase in office expenses.

Sales and Marketing. Sales and marketing expenses increased by 6.4% to RMB32.3 million (US$3.9 million) in 2002 from RMB30.4 million in 2001, primarily due to increased commission payments to our marketing partners that referred customers to us, increased expenses in connection with our customer reward program and the installation of additional marketing counters at airports. The increase was offset in part by a decrease in compensation to sales and marketing personnel resulting from changes in our compensation structure.

General and Administrative. General and administrative expenses increased by 6.0% to RMB15.7 million (US$1.9 million) in 2002 from RMB14.8 million in 2001.

Share-Based Compensation. Share-based compensation expenses increased substantially to RMB462,140 (US$55,834) in 2002 from RMB21,950 in 2001, due to the issuance of additional share options under our 2000 stock option plan.

Amortization of Goodwill and Other Intangible Assets. Amortization expenses decreased by 80.4% from RMB1.8 million in 2001 to RMB353,241 (US$42,677) in 2002, because we did not recognize in 2002 any further amortization expenses on goodwill arising from the 2000 acquisition of Beijing Modern Express, following the adoption in 2002 of a new accounting policy, and because the marketing agreement that we acquired from Beijing Modern Express was fully amortized in 2001.

Other Expenses Incurred for Joint Venture Companies. Other expenses, mainly consisting of payroll compensation and related expenses incurred for joint venture companies, remained stable at RMB915,056 (US$110,553) in 2002.

Interest Income and Expenses. Interest income decreased by 85.4% from RMB2.2 million in 2001 to RMB319,230 (US$38,568) in 2002, primarily due to a significant reduction in the interest rate for our bank deposits. Interest expenses decreased to RMB41,261 (US$4,985) in 2002 from RMB62,058 in 2001, because we repaid our short-term RMB bank loan in early 2002.

Other Income (Expense). Other income increased substantially to RMB1.0 million (US$0.1 million) in 2002 from other expenses of RMB79,858 in 2001, principally because we received financial subsidies of RMB783,900 (US$94,707) from a government authority in Shanghai in 2002.

Income Tax Benefit (Expense). Income tax expense substantially increased to RMB10.0 million (US$1.2 million) in 2002 compared to income tax benefit of RMB2.3 million in 2001, primarily because we started to generate taxable income in 2002.

Net Income (Loss). Net income increased to RMB14.2 million (US$1.7 million) in 2002 compared to a net loss of RMB15.3 million in 2001, as a result of the cumulative effect of the above factors.

2001 Compared to 2000

Revenues. We had revenues of RMB46.4 million in 2001, an increase of 571.4% over RMB6.9 million in 2000. This revenue growth was mostly driven by our increased revenues from the hotel reservation business.

Hotel Reservation. Revenues from our hotel reservation business increased substantially by 712.5% to RMB43.4 million in 2001 from RMB5.3 million in 2000, primarily due to our acquisition of an increasing number of hotel suppliers and customers, and also due to our acquisition of Beijing Modern Express in October 2000.

Air-ticketing. Revenues from our air-ticketing business increased substantially by 116.6% to RMB1.8 million in 2001 from RMB845,776 in 2000, primarily due to our expanded customer base and related transaction volume.

Packaged-tour. Packaged-tour revenues increased by 91.4% to RMB594,802 in 2001 from RMB310,750 in 2000, primarily due to our expanded customer base and the resulting increased sales of our packaged-tour products.

Other Businesses. Revenues from our other lines of business increased by 39.5% to RMB576,075 in 2001 compared to RMB412,940 in 2000, primarily because we began to sell our VIP membership cards in 2001. This increase was partially offset by a decrease in our online advertising revenue due to reduced demand.

Net Revenues. Our net revenues increased from RMB6.5 million in 2000 to RMB44.0 million in 2001 as a result of our increased revenues, partially offset by the resulting increase in business tax and related surcharges over the same periods.

Costs of Services. Costs of services in 2001 substantially increased to RMB7.9 million from RMB1.9 million in 2000. The increase in costs of services was primarily attributable to increased staff costs and increased telecommunication expenses in our customer service center as a result of the overall expansion of our business.

Operating Expenses. Operating expenses in 2001 increased by 53.7% to RMB55.7 million from RMB36.2 million in 2000, primarily due to increases in sales and marketing and general and administrative expenses and amortization of goodwill and other intangible assets.

Product Development. Product development expenses increased by 13.8% to RMB7.8 million in 2001 from RMB6.8 million in 2000, primarily due to hiring more personnel in hotel relationship management and technology support and development, as well as increases in office expenses and telecommunications expenses necessary to enhance our transaction and service platform.

Sales and Marketing. Sales and marketing expenses increased by 74.7% to RMB30.4 million in 2001 from RMB17.4 million in 2000, primarily because we committed significant resources to exploring additional sales and marketing channels.

General and Administrative. General and administrative expenses increased by 26.9% to RMB14.8 million in 2001 from RMB11.7 million in 2000, primarily due to increases in staff costs and travel expenses in connection with the overall expansion of our hotel reservation business.

Share-Based Compensation. We incurred RMB21,950 share-based compensation in 2001 for the amortization of deferred share-based compensation related to share options granted during that period.

Amortization of Goodwill and Other Intangible Assets. Amortization expenses increased substantially from RMB370,822 in 2000 to RMB1.8 million in 2001, because we recorded the full-year amortization expenses of goodwill and intangible assets, including customer list and marketing agreements, with respect to our acquisition of Beijing Modern Express, which we acquired in October 2000.

Other Expenses Incurred for Joint Venture Companies. We incurred other expenses, mainly consisting of payroll compensation and related expenses for joint venture companies, in the amount of RMB934,572 in 2001, but we did not incur such expenses in 2000. These expenses were incurred in relation to the development of hotel management business prior to the establishment of Home Inns.

Interest Income and Expenses. Interest income increased by 198.0% to RMB2.2 million in 2001 from RMB735,178 in 2000, because we raised a substantial amount of funds near the end of 2000, a portion of which were invested in time deposits. We incurred interest expenses of RMB62,058 in 2001, and none in 2000, because we obtained a short-term RMB bank loan to meet the RMB expense requirements in 2001.

Other Expenses. Other expenses increased marginally to RMB79,858 in 2001.

Income Tax Benefit. Income tax benefit in 2001 decreased by 67.0% to RMB2.3 million from RMB7.1 million in 2000, primarily due to the decrease in losses incurred to RMB17.6 million in 2001 from RMB31.0 million in 2000. The decrease in income tax benefit in 2002 was a result of an increase in non-deductible expenses.

Net Loss. Our net loss decreased by 36.3% to RMB15.3 million in 2001 from RMB24.0 million in 2000, primarily because our revenues increased significantly while our established transaction and service platform was able to keep up with the increased transaction volume without the need to incur expenses at a rate similar to our revenue increase rate.

Liquidity and Capital Resources

Liquidity. The following table sets forth the summary of our cash flows for the periods indicated:



	Year Ended December 31,												Nine Months Ended September 30,

	2000			2001			2002			2002			2002			2003			2003

	(unaudited)												(unaudited)
	RMB			RMB			RMB			US$			RMB			RMB			US$

	(in thousands)
Net cash provided by (used in) operating activities		(28,584	)		(19,891	)		23,427			2,830			10,815			37,604			4,543
Net cash provided by (used in) investing activities		(13,648	)		(30,593	)		3,427			414			11,626			(11,858	)		(1,433	)
Net cash provided by (used in) financing activities		128,187			4,000			(30,425	)		(3,676	)		(3,456	)		5,589			675
Net increase (decrease) in cash and cash equivalents		85,977			(46,444	)		(3,532	)		(427	)		19,025			31,422			3,796
Cash at beginning of period		2,931			88,908			42,464			5,130			42,464			38,931			4,703
Cash at end of period		88,908			42,464			38,931			4,703			61,488			70,353			8,500

Net cash provided by operating activities was RMB37.6 million (US$4.5 million) for the nine months ended September 30, 2003, compared to RMB10.8 million for the same period in 2002. Net cash provided by operating activities was RMB23.4 million (US$2.8 million) in 2002 compared to net cash used in operating activities of RMB19.9 million in 2001. We began to have positive net cash flow in the fourth quarter of 2001. The increase in our net revenue resulting from our increased transaction volume, coupled with the low-cost structure of our operations and high utilization rate of our transaction and service platform, primarily contributed to our positive net cash position.

Net cash used in investing activities amounted to RMB11.9 million (US$1.4 million) for the nine months ended September 30, 2003, compared to net cash provided by investing activities of RMB11.6 million for the nine months ended September 30, 2002. This change was mainly due to the

withdrawal of our short-term time deposit in the nine months ended September 30, 2002. Net cash provided by investing activities amounted to RMB3.4 million (US$0.4 million) in 2002, compared to net cash used in investing activities of RMB30.6 million in 2001, principally due to our purchase of a short-term time deposit in 2001 and the subsequent withdrawal in 2002, the purchase of the air-ticketing business of Beijing Hai’an of RMB2.6 million (US$0.3 million) and our premises in Shanghai of RMB7.2 million (US$0.9 million) as well as the investment of RMB5.5 million (US$0.7 million) in Home Inns Beijing in 2002. Net cash used in investment activities amounted to RMB13.6 million in 2000, mainly consisting of the cash consideration of RMB8.0 million paid for the purchase of Beijing Modern Express, and the loans of RMB2.0 million extended to related parties for the acquisition or establishment of certain affiliated entities.

Net cash provided by financing activities amounted to RMB5.6 million (US$0.7 million) for the nine months ended September 30, 2003, compared to net cash used in financing activities of RMB3.5 million for the nine months ended September 30, 2002, because we agreed to use the entire proceeds from the issuance of Series C preferred shares to redeem some of our outstanding shares held by our existing shareholders and pay for professional services related to the issuance of Series C preferred shares, but we did not receive payment instructions from some of our shareholders in September 2003. We have recently paid off all of the remaining shareholders in connection with redemption of some of their shares. Net cash used in financing activities was RMB30.4 million (US$3.7 million) in 2002, compared to net cash provided by financing activities of RMB4.0 million in 2001. This change was due to our payment of cash dividends in the amount RMB27.3 million (US$3.3 million) in 2002 and entering into our RMB4.0 million short-term bank loan in 2001. Net cash provided by financing activities of RMB128.2 million in 2000 represented the net proceeds from issuance of Series A preferred shares and Series B preferred shares.

Capital Resources. We have historically financed our capital expenditure requirements with cash flows from operations, as well as through the sale of our Series A preferred shares and Series B preferred shares.

We made capital expenditures of RMB4.6 million, RMB5.8 million, RMB13.2 million (US$1.6 million) and RMB8.1 million (US$1.0 million) in 2000, 2001, 2002 and the nine months ended September 30, 2003, respectively, and expect to make additional capital expenditures totaling approximately RMB5.0 million (US$0.6 million) for the rest of 2003 and approximately RMB16.0 million (US$1.9 million) for 2004. The capital expenditures in the past principally consisted of purchases of servers, workstations, computers, computer software, and other items related to our network infrastructure. In addition, we spent RMB7.2 million (US$0.9 million) in 2002 to purchase most of our premises in Shanghai. We expect our capital expenditures in 2003 to primarily consist of purchases of additional information technology-related equipment. In addition, we expect that our capital expenditures will increase in the future as we make technological improvements to our transaction and service platform.

As of September 30, 2003, our primary source of liquidity was RMB70.4 million (US$8.5 million) of cash. In 2001, we borrowed a RMB4.0 million short-term bank loan with an annual interest rate of 6.138%. We repaid this loan in its entirety in early 2002. We have no outstanding bank loans or financial guarantees or similar commitments to guarantee the payment obligations of third parties.

We believe that our current cash and cash equivalents, cash flow from operations and the proceeds from this offering will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for the foreseeable future. We may, however, require additional cash resources due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue.

Contractual Cash Obligations

We have entered into leasing arrangements relating to office premises, equipment and others that are classified as operating leases. The following sets forth our commitments under operating leases as of September 30, 2003:


	Office		Equipment and
	Premises		Others		Total


	(in thousands of RMB)
Less than 1 year		2,432,119		3,984,660		6,416,779
1-3 years		623,704		536,985		1,160,689
3-5 years		—		—		—
More than 5 years		—		—		—

Other than the leasing obligations set forth above, we do not have any long-term commitments.

Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency forward contracts. We do not engage in trading activities involving non-exchange traded contracts.

Principal Accountant Fees and Services

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by PricewaterhouseCoopers, our principal external auditors, for the periods indicated. We did not pay any tax related or other fees to our auditors during the periods indicated below.

For the Year Ended December 31,

2001(1)

2002

Audit fees(2)

RMB304,620

RMB424,375

US$

51,253

Audit-related fees(3)

—

23,167

2,798


(1)	Audit fees paid to external auditors in 2001 represent fees billed by Arthur Andersen •Hua Qiang Certified Public Accountants, our then principal external auditors.

(2)	“Audit fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors for the audit of our annual financial statements.

(3)	“Audit-related fees” means the aggregate fees billed in each of the fiscal years listed for assurance and related services by our principal auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.” Services comprising the fees disclosed under the category of “Audit-related fees” involve principally the performance of certain agreed upon procedures.

Inflation

Inflation in China has not had a material impact on our results of operations in recent years. According to the National Bureau of Statistics of China, the change in Consumer Price Index in China was 0.4%, 0.7%, (0.8%) and 0.6% in 2000, 2001, 2002 and the six months ended June 30, 2003, respectively.

Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk. Our exposure to interest rate risk for changes in interest rates relates primarily to the interest income generated by excess cash deposited in banks. We have not used any derivative financial instruments to hedge interest rate risk. We have not been exposed nor do we anticipate being exposed to

material risks due to changes in interest rates. Our future interest income may fluctuate in line with changes in interest rates. However, the risk associated with fluctuating interest rates is principally confined to our cash deposits in banks, and, therefore, our exposure to interest rate risk is minimal and immaterial.

Foreign Exchange Risk. We are exposed to foreign exchange risk arising from various currency exposures. Some of our expenses, including rent for our Hong Kong office and salaries of employees located in Hong Kong, is denominated in foreign currencies while almost all of our revenue is denominated in RMB. We have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency risk. Therefore, our exposure to foreign exchange risks is minimal and immaterial.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations,” which addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement requires that an entity recognize an asset retirement obligation in the period in which it is incurred, and the entity shall capitalize the asset retirement cost by increasing the carrying amount of the related asset by the same amount as the liability and subsequently allocate that retirement cost to expense over the asset’s useful life. This statement is effective for fiscal years beginning after June 15, 2002. We do not expect that the adoption of this statement will have a material effect on our financial position or results of operations.

In April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” Statement of Financial Accounting Standards No. 145 requires gains and losses on extinguishments of debt to be classified as income or loss from continuing operations, rather than as extraordinary items, as previously required under Statement of Financial Accounting Standard Board No. 4, “Reporting Gains and Losses from Extinguishment of Debt, an amendment of APB Opinion No. 30.” Extraordinary treatment will be required for certain extinguishments, as provided in APB Opinion No. 30, “Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” The statement also amended Statement of Financial Accounting Standards No. 13 “Accounting for Leases” for certain sale-leaseback transactions and sublease accounting. This statement is effective since January 1, 2003. The adoption of this statement did not have a material effect on our financial position or results of operations.

In December 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” This statement amends Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for companies that voluntarily change to a fair value-based method of accounting for share-based employee compensation. This statement also amends the disclosure provisions of Statement of Financial Accounting Standards No. 123. The provisions of Statement of Financial Accounting Standards No. 148 are effective for fiscal years ending after December 15, 2002. We have elected to continue to account for share-based compensation under the provisions of APB 25 and have followed the disclosure requirements under Statement of Financial Accounting Standards No. 148.

In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” Statement of Financial Accounting Standards No. 146 nullifies Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity,” under which a liability for an exit cost was recognized at the date of an entity’s commitment to an exit plan. This statement requires that a liability for a cost associated with an exit or disposal activity be recognized at fair value when the liability is incurred. The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002. We do not believe that this announcement will have a significant impact on our financial statements.

In November 2002, the Financial Accounting Standards Board issued Financial Accounting Standards Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others.” Statement of Financial Accounting Standards Interpretation No. 45 requires the recognition of a liability for certain guarantee obligations issued or modified after December 31, 2002. This statement also clarifies disclosure requirements to be made by a guarantor for certain guarantees. The disclosure provisions of Statement of Financial Accounting Standards Interpretation No. 45 are effective for interim periods and fiscal years ending after December 15, 2002. The adoption of this statement did not have a material effect on our financial position or results of operations.

In January 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.” This statement requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Statement of Financial Accounting Standards Interpretation No. 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, this statement must be adopted for the first interim or annual period beginning after June 15, 2003. The financial statements of Guangzhou Guangcheng, an affiliated Chinese entity established on April 28, 2003, were consolidated into our financial statements on the date of establishment, while the financial statements of Ctrip Commerce, Shanghai Huacheng and Beijing Chenhao, all of which were established prior to January 31, 2003, was consolidated into our financial statements starting the third quarter of 2003. The adoption of FIN 46 did not have a significant impact on the presentation of our historical financial statements as of December 31, 2000, 2001 and 2002 and September 30, 2003 and for the years and the nine months then ended.

In June 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities.” It is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. All provisions of Statement of Financial Accounting Standards No. 149 should be applied prospectively. The adoption of this statement did not have a material effect on our financial position or results of operations.

In June 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or as an asset in some circumstances). It is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of this statement and still existing at the beginning of the interim period of adoption. Restatement is not permitted. The adoption of this statement did not have a material effect on our financial position or results of operations.

BUSINESS

Overview


	•	choose and reserve hotel rooms in cities throughout China and selected cities abroad;

	•	book and purchase airline tickets for domestic and international flights originating from China; and

	•	choose and reserve packaged tours that include transportation, accommodation, and sometimes guided tours as well.

For the nine months ended September 30, 2003, we derived 85.8% of our revenues from the hotel reservation business and 10.5% of our revenues from our air-ticketing business. Our packaged-tour business contributed 3.7% of our revenues for the nine months ended September 30, 2003.

September 30, 2003, we generated revenues of RMB111.3 million (US$13.4 million) and net income of RMB29.2 million (US$3.5 million) despite the outbreak of SARS during the second quarter of 2003.

Our business was commenced in June 1999. In March 2000, we established a new holding company, Ctrip.com International, Ltd., in the Cayman Islands, and soon thereafter, all of the shareholders of Ctrip.com (Hong Kong) Limited, our now directly wholly owned subsidiary, transferred their shares to the holding company in exchange for shares of the holding company. Since we commenced our operation, we have conducted substantially all of our operations in China. We operate as a foreign investment enterprise in China through our subsidiaries, Ctrip Computer Technology and Ctrip Travel Information, as well as our affiliated Chinese entities, including


	•	Ctrip Commerce, which holds advertising and Internet content provision licenses;

	•	Shanghai Huacheng, which holds domestic travel agency and air-ticketing licenses;

	•	Beijing Chenhao, which holds an air-ticketing license;

	•	Guangzhou Guangcheng, which has recently received an air-ticketing license; and

	•	Shanghai Cuiming, which holds a license to conduct both cross-border and domestic packaged-tour businesses.

We hold no ownership interest in any of our affiliated Chinese entities. Qi Ji, a co-founder and director of our company, Min Fan, a co-founder and executive vice president of our company, and Alex Nanyan Zheng, a vice president of our company, are the principal shareholders of our affiliated Chinese entities. See “Prospectus Summary — Corporate Structure” for the place of formation, ownership interest and affiliation of each of our subsidiaries and affiliated entities. We have made interest-free loans to Qi Ji, Min Fan and Alex Nanyan Zheng solely in connection with the capitalization or acquisition of our affiliated entities. Each of these loans will mature ten years after the date of the applicable loan agreement. In the event that the Chinese government lifts its restrictions on foreign ownership of the air-ticketing, travel agency, advertising or Internet content provision business in China, we will exercise our right to purchase all of the outstanding equity interests of our affiliated Chinese entities immediately, and the loans will be cancelled in connection with such purchase. For a detailed description of the terms of these loans, see “Related Party Transactions — Arrangements with Affiliated Chinese Entities.”

Our principal executive offices are located at 3F, Building 63-64, No. 421 Hong Cao Road, Shanghai 200233, People’s Republic of China, and our telephone number is (8621) 3406-4880. We have appointed CT Corporation System, 111 Eighth Avenue, New York, NY 10011, as our agent for service of process in the United States.

Industry Background

Growth of the Chinese Travel Industry. The Chinese travel industry is large and growing rapidly. The following chart contains certain data from CEIC Data Company Limited concerning the Chinese economy and the travel industry during the period from 1998 through 2002.


					Number of		Number of
	Nominal Gross		Expenditure on		3-, 4- and 5-Star		Civil Aviation
	Domestic Product		Tourism		Hotels in Operation		Passenger Kilometers

	(in billions of RMB)		(in millions of RMB)				(in billions)
1998		7,835		239,118		1,325		80,024
1999		8,207		283,192		1,573		85,728
2000		8,947		317,554		2,368		97,054
2001		9,731		352,237		2,857		109,135
2002		10,479		387,836		3,656		126,870

China’s gross domestic product grew from RMB7,835 billion in 1998 to RMB10,479 billion (US$1,266 billion) in 2002, representing a compound annual growth rate of 7.5% during this period. The aggregate expenditure on tourism in China increased from RMB239.1 billion in 1998 to RMB387.8 billion (US$46.9 billion) in 2002, representing a compound annual growth rate of 12.8% during this period. According to China’s tenth five-year plan, the Chinese government expects an approximately 7% compound annual growth rate of China’s gross domestic product from 2000 to 2005. We anticipate that demand for travel services in China will continue to increase substantially in the foreseeable future as the Chinese economy continues to grow.

The statistics included in this prospectus relating to the Chinese travel industry and economy are derived from various government and institute research publications. We have not independently verified such information, and you should not unduly rely upon it.

Fragmented Hotel and Air-ticketing Industries. The travel intermediary industries are highly fragmented in China. According to CEIC Data Company Limited, as of December 31, 2002, there were 3,656 three-, four-and five-star hotels in China. The biggest hotel chain in China, the Jin Jiang Group, manages approximately 70 hotels. Furthermore, China does not have any nationwide hotel distribution system among travel intermediaries. As a result, travelers traditionally do not have access to comprehensive information on hotels. In the air-ticketing sector, the Civil Aviation Administration of China, or CAAC, requires an air-ticketing agency to obtain a separate license from CAAC’s regional branch in order to conduct business in any city. This requirement has hindered the ability of local air-ticketing agencies to expand nationwide.

Growing but Under-served Independent Travelers in China. The rapid growth of the Chinese economy in the past decade has led to a substantial increase in business activity and personal disposable income, as well as changes in consumption patterns. As a result, there has been a significant increase in the demand for travel services in China. However, as travel agencies in China often focus on tour groups and devote limited resources to serving independent travelers, independent travelers have limited access to discounted rates or comprehensive information on hotels and flights.

Functions of Travel Consolidators. Travel consolidators like us are able to offer information aggregated from various hotels and airlines to independent travelers, enabling them to make informed and cost-effective hotel and flight bookings through customer service centers or websites. To both the hotel and airline industries, travel consolidators offer an efficient distribution platform that improves occupancy levels and helps increase overall revenues. To independent travelers, travel consolidators are a new and more reliable source offering access to the generally wider selection of inventory and lower rates than those otherwise available.

Usage of Customer Service Centers in the Travel Industry. Call centers or customer service centers are a relatively new concept in China but provide an effective channel to distribute travel products and services. Travelers can gather and evaluate travel information, receive recommendations from customer service representatives and book transactions more efficiently by contacting customer service centers any time,

day or night, instead of visiting travel agents who generally offer services only during daytime business hours, tend to focus on group tours and typically require in-person visits. In addition, the increasing number of mobile phone users in China, with approximately 250.0 million mobile phone users as of September 30, 2003 according to CEIC Data Company Limited, is expected to enhance the popularity of using customer service centers, since travelers can now call to change their travel plans after they have already begun their trip, when public telephones are often unavailable. In addition, competitive labor costs in China have allowed customer service centers to become a cost-effective transaction tool in China.

Growth of the Internet and Online Commerce. According to the China Internet Network Information Center, China now ranks second in the world in terms of number of Internet subscribers. The Internet’s broadly distributed and easily accessible environment creates the ideal foundation for new marketplaces, which provide increased search efficiency, comprehensive information and competitive pricing. The Internet brings efficiencies to markets characterized by the presence of large number of geographically dispersed buyers and sellers and purchase decisions involving large amounts of information from multiple sources. We believe that the travel industry, which inherently involves broadly dispersed travelers as well as a wide selection of travel suppliers in terms of location and price, is especially well-suited to benefit from increased Internet and online commerce adoption.

Our Strengths

We bridge the gap between independent travelers and travel suppliers. Through our sophisticated transaction and service platform consisting of our centralized toll-free, 24-hour customer service center and bilingual websites, we serve primarily the traditionally underserved yet fast growing independent travelers segment in China by helping them plan and book their trips while helping travel suppliers improve the efficiency of their marketing and distribution. We have achieved a leading position, in part, by establishing the competitive strengths described below.

A Leading Travel Brand in China. We have invested significant resources in developing and promoting our brand since our inception. The China Travel Journal ranked our Ctrip brand among the top travel brands in China in 2002. The broad recognition of our Ctrip brand has enhanced our ability to quickly attract new travel customers, especially frequent independent travelers, as evidenced by the rapid growth of our customer base and transaction volume.

Our reputation and market position have also provided us with easier and more effective access to hotels and airlines nationwide. We are able to obtain guaranteed allotment arrangements from over 490 of our hotel suppliers. These arrangements enable us to offer a specified number of hotel rooms during any given month to our customers without taking any inventory risk and to confirm the room reservations instantly.

Large Supplier Network and Nationwide Coverage. We have established supplier relationships with over 1,700 hotels across all major geographic regions in China and over 450 hotels abroad, as of October 31, 2003. We have also cultivated supplier relationships with all major domestic Chinese airlines and many international airlines that operate flights originating from China. We believe we are the only airline ticket consolidator in China with a centralized 24-hour information and reservation center and a settlement and delivery infrastructure covering all of the most economically prosperous regions of China. Our broad supplier network has enabled us to offer a broad range of travel product and service offerings, including packaged tours, for our independent traveler customers. We believe that our established and extensive supplier relationship positions us well to compete with existing and potentially new competitors.

Scalable Platform and Flexible Cost Structure. We have created a cost-effective transaction and service platform consisting of our customer service center and websites. Our business is highly scalable because of the low costs associated with our transaction and service platform. We can hire and train new representatives for our customer service center quickly and cost-effectively to cope with the expected increase in transaction volume, because of the relatively low labor cost in China, as well as our ability to efficiently train new staff to serve customers. Our technology platform offers further scalability advantages as we can upgrade our existing infrastructure with limited additional investment. Therefore, we believe that we can keep up with the expected pace of increase in our transaction volume without incurring substantial incremental

costs. In addition, the compensation of our customer service representatives, which forms a significant portion of our costs of services, is linked to the number of transactions successfully completed by them. In part because of our relatively flexible cost structure, we were able to maintain positive net income in the second quarter of 2003 despite the significant negative impact of the SARS outbreak.

Excellent Customer Service. We place significant emphasis on technology, personnel and training to facilitate superior customer service. We operate our centralized toll-free customer service center 24 hours a day and seven days a week to provide comprehensive and real-time assistance to our customers. Our customer service representatives are equipped to review a comprehensive list of the hotels in individual markets, together with the related price, amenities and availability information, and real-time flight information, while simultaneously booking hotels, airline tickets and packaged tours for customers. Our customer service representatives are also trained to provide travel advisory services at our customers’ request. Moreover, our user-friendly websites allow customers to quickly review hotel and flight information and book hotel accommodations and airline tickets and, in some instances, receive instant confirmation.

In addition, we maintain a customer database containing information on the transaction history and preferences of each customer who has booked a travel product through us. We also have a post-transaction customer service division responsible for addressing any issues or concerns raised by our customers. We believe our excellent customer service has contributed to our large number of repeat customers.

Advanced Infrastructure and Technology. We have developed an advanced infrastructure and technology platform with a high level of reliability, security and scalability. At the front end, our system allows us to ensure service quality by promptly processing customer inquiries and requests and by monitoring the performance of our customer service representatives on an around-the-clock basis. As a result, we maintain an extremely high service ratio with very limited aborted calls due to unacceptably long waiting time. Our websites are custom-built in-house to exacting specifications to ensure the best user experience. Our websites, www.ctrip.com and www.gotochina.com, have user-friendly designs with well laid-out information. We work closely with our web host to ensure that our customers can obtain the desired information and complete transactions with us quickly and securely.

At the back end, our proprietary booking software allows us to update hotel room and airline ticket availability and pricing information. The real-time nature of our software system allows us to recommend our preferred hotels to customers when they request a recommendation. Our booking software is integrated with our websites and customer service center operations. In addition, we have developed an electronic confirmation system that enables us to transmit a customer’s booking information to those hotels that are linked to this system and to receive confirmation from these hotels. We believe that our advanced transaction and service platform is capable of handling increasing traffic without substantial incremental costs.

Experienced Management Team. Our senior managers have on average more than eight years of experience in their relevant fields of information technology, finance and travel management. Key members of our management team include James Jianzhang Liang, our Chief Executive Officer, Neil Nanpeng Shen, our Chief Financial Officer, and Min Fan, our Executive Vice President, all of whom are founders of our company. Prior to joining us, Mr. Liang had worked in the information technology field in Silicon Valley and China for over eight years, Mr. Shen had worked at leading global investment banks in New York and Hong Kong for over eight years, and Mr. Fan had been the chief executive officer for one of the leading domestic travel agencies in Shanghai for over three years. Under our management team’s leadership, we have experienced substantial growth in our transaction volume and customer base and have successfully integrated the businesses we acquired into our operation. Our senior managers have indicated their intent to continue to manage the company after this offering.

Our Strategy

Our goal is to create long-term shareholder value by enhancing our position as a leading hotel and air-ticket consolidator in China. We believe that China’s highly fragmented travel industry and underserved

frequent independent traveler market provide us with significant growth opportunities. We intend to pursue the following strategies to achieve our goal:

Leverage and Strengthen the Ctrip Brand. To hotel and airline ticket suppliers, the Ctrip brand represents a sizable and increasingly important source of customers. We intend to leverage this reputation to attract new suppliers, and negotiate more favorable contractual terms with our existing suppliers. To our marketing partners, Ctrip is regarded as a partner that enhances their product offerings. We aim to deepen our existing relationships with our marketing partners and establish new relationships with other potential marketing partners, allowing us to further promote our brand, cross-sell our products and acquire customers in a more cost-effective manner.

In addition, we intend to further strengthen Ctrip as a dominant consumer travel brand. We plan to continue to pursue a focused marketing and advertising campaign through various targeted promotions to acquire new customers and encourage our existing customers to transact more frequently. For example, we distribute membership cards through in-flight magazines to attract new customers, and we maintain a membership reward program that offers rewards to frequent customers to encourage repeat transactions.

Expand Our Hotel Supplier Network and Room Inventory. Although we believe that we are the largest hotel consolidator in China in terms of gross bookings, there are significant opportunities to further expand our hotel reservation service. We plan to focus the expansion of our hotel reservation business on hotels with three-, four- and five-star ratings, which offer us higher profit margins per transaction. We intend to build upon our already extensive hotel supplier relationships in China’s major cities such as Beijing and Shanghai. In addition, we intend to enhance our presence in selected regional centers and medium-sized cities that offer significant growth opportunities driven by China’s robust economy and rising disposable income per capita.

We plan to capitalize on our substantial and growing customer base and transaction volume by continuing to negotiate with hotel suppliers to increase rooms to be allocated to us on the guaranteed allotment basis. We have guaranteed allotment arrangements with over 500 hotels in China as of October 31, 2003, and will try to increase the number of rooms allotted to us from these hotels. In addition, we intend to pursue guaranteed allotment arrangements with our hotel suppliers that currently do not have such arrangements with us.

Expand Air-ticketing and Other Travel Product Offerings. Our air-ticketing business contributed less than 11% of our revenues in 2002 and the nine months ended September 30, 2003, but has demonstrated substantial growth potential. We intend to establish airline ticket issuance and delivery infrastructure in more cities throughout China. We also intend to continue to expand our air-ticketing business by selling more tickets for international flights, as the commissions per ticket for international flights are generally higher than that for domestic flights. To further diversify our revenue sources and in response to the increasing sophistication of Chinese travelers’ tastes, we intend to further promote the packaged-tour products that offer our customers the flexibility to choose desired flight and hotel combinations. We believe that our packaged-tour products will attract increasing interest among our existing users as well as new customers.

Enhance Transaction and Service Platform. We intend to enhance the features of our transaction and service platform to keep up with the expected rapid increase in our transaction volume while maintaining the high quality of our customer service. With respect to our customer service center, we intend to continue to invest in training our customer service representatives and upgrading our information technology systems underlying the customer service center to ensure consistently high-quality customer service. With respect to our websites, we plan to continually update new software features and editorial content and improve the accessibility of our websites through various Internet access channels such as wireless devices.

We believe the Internet as an information distribution and transaction platform presents further cost efficiencies and scalability opportunities. To exploit the additional cost savings and scalability benefits, we intend to promote the migration of customers to our websites. We have set up various promotion programs such as offering our customers up to twice the reward points on transactions effected online as compared to our customer service center.

In addition, we plan to continue to enhance our customer database management tools to identify our customers’ travel preferences and transaction patterns in order to offer them more focused services. We also intend to further promote our electronic confirmation system with our existing hotel suppliers. Currently, more than 160 hotels are using our electronic confirmation system to interface with us, and we plan to promote the electronic confirmation system with our other hotel suppliers. We believe that this system will boost our transaction efficiency significantly.

Pursue Selective Strategic Acquisitions and Expand into Hong Kong, Macau and Taiwan. We have become a leading consolidator of hotel accommodations and airline tickets in China in part through the acquisition of the largest offline hotel reservation center in China, Beijing Modern Express, in October 2000, and the air-ticketing business of Beijing Hai’an Air-ticketing Agency in February 2002. We have successfully integrated these acquired businesses into our business operations. We intend to explore additional acquisitions that would allow us to expand the reach and scope of our travel products and services as well as our customer base in the domestic markets in China.

We also aim to enter Hong Kong, Macau and Taiwan. The closer economic ties between China and other parts of Greater China, together with the recent liberalization of restrictions formerly imposed on mainland Chinese traveling to Hong Kong, are expected to increase the cross-border traffic between China and Hong Kong significantly. Given the similarities in language, culture and consumption behavior between residents of mainland China and Hong Kong, Macau and Taiwan, we foresee substantial growth opportunities in entering these markets, which can be executed at a relatively low cost and with limited risk.

Expand into the Merchant Business. Currently, we act as agent in substantially all of our transactions, passing our customers’ reservations to travel suppliers without assuming any risks for customers’ cancellations or no-shows. While we intend to continue to use the agency model as our primary business model, we plan to gradually establish a merchant business relationship with our most popular travel service suppliers beginning in the second or third quarter of 2004. In the merchant business relationship, we would buy hotel rooms and/or airline tickets in advance before selling them to our customers and thereby bear the inventory risk. However, if our hotel room and airline ticket inventory were sold successfully, we would expect to realize substantially higher profits per room or airline ticket than we do under our current agency model. We believe that our growing customer base constitutes a solid foundation for our merchant business and would help to minimize any potential inventory risk.

Products and Services

We began offering hotel reservation and air-ticketing services in October 1999. For the nine months ended September 30, 2003, we derived 85.8% of our revenues from the hotel reservation business and 10.5% of our revenues from the air-ticketing business. In addition, we offer other travel-related products and services including packaged tours that are either bundled by us and include transportation and hotel, or by third party travel agencies and include transportation, hotel and, in most cases, a guided tour.

Hotel Reservations. Our hotel booking volume has increased substantially since our inception. The following table shows the total room nights we sold for the periods indicated.

For Quarters Ended

September 30,

December 31,

March 31,

June 30,

September 30,

December 31,

March 31,

June 30,

September 30,

2001

2002

2003

(in thousands)

Room Nights

234.3

262.1

273.8

374.4

438.8

467.7

486.0

280.5*

747.8


*	Decrease primarily due to the SARS outbreak from March 2003 through June 2003.

As of October 31, 2003, we had room supplier relationships with over 1,700 hotels in China and over 450 hotels abroad, which cover a broad range of hotels in terms of price and geographical location. The majority of our hotel suppliers fall into the three-, four- and five-star categories. Revenues from our bookings for three-, four- and five-star hotels comprised approximately 95% of our revenues from our hotel reservation

business for the nine months ended September 30, 2003. The average room rate booked through us was approximately RMB488 (US$59) per night in October 2003. The following table shows the number of our hotel suppliers in each of the major cities indicated as of October 31, 2003:

Shanghai

250

Beijing

243

Hangzhou

Guangzhou

Shenzhen

Hong Kong

Nanjing

Wuhan

We act as agent in substantially all of our hotel-related transactions. Our customers receive confirmed bookings and generally pay the hotels directly upon completion of their stays, and in general, we pay no penalty to the hotels if our customers do not check in. For some of our hotel suppliers, we earn pre-negotiated fixed commissions on hotel rooms we sell. For other hotels, we have commission arrangements that we refer to as the “ratchet system,” whereby our commission rate per room night increases as the volume of room nights we sell for such hotel during such month increases.

We contract with hotels for rooms under two agency models: the “guaranteed allotment” model and the “on-request” model. Under either agency model, we enter into agreements with our hotel suppliers containing most if not all of the following provisions:


	•	Pricing. The hotel is required to offer us room prices that are lower than its published prices. If the hotel has promotional sales, it is required to notify us in advance so we can lower our prices proportionately.

	•	Room Supplies. The hotel is required to notify us in advance if it anticipates a shortage of rooms.

	•	Customer Accommodation. If the reserved room is not available when our customer checks in to the hotel due to reasons caused by the hotel, such as over-booking, the hotel is required to upgrade the customer free-of-charge or arrange for accommodation in another hotel with the same or higher rating and price.

	•	Extension of Stay. If our customer requests an extension of stay, the hotel is required to notify us immediately, and we book the extended stay and earn the resulting commissions.

	•	Confirmation of Customer’s Stay. We confirm a customer’s actual length of stay by contacting the hotel to verify the customer’s check-in and check-out dates. With the hotels that have implemented our electronic confirmation system, we receive confirmation through such system.

	•	Commission Payments. The hotel will pay us commissions each month based on the number of room nights we sell.

In addition to the agreements that we enter into with all of our hotel suppliers, we enter into a supplemental agreement with each of the hotel suppliers with which we have a guaranteed allotment arrangement. Pursuant to this agreement, a hotel gives us a specified number of guaranteed available rooms every day, allowing us to provide instant confirmations on such rooms to our customers before notifying the hotel. The hotel is required to notify us in advance if it will not be able to make the guaranteed rooms available to our customers due to reasons beyond its control.

We have contracted with over 500 hotels in China for guaranteed room allotments, allowing us to sell rooms to our customers even during peak seasons and provide instant confirmation. Rooms booked in hotels with which we have a guaranteed allotment arrangement currently account for approximately 50% of our total hotel room transaction volume. With the remaining hotel suppliers, we book rooms on an “on-request” basis, meaning our ability to secure hotel rooms for our customers is subject to room availability at the time of booking.

Our typical hotel reservation transaction involves the following major steps:


	•	Initiating an Inquiry. Our customer either conducts a search on our website, or calls our customer service center to learn more about hotels at a destination. Upon our customer’s inquiry,


		our customer service representative are trained, and our website is programmed, to recommend hotels to the customer.

	•	Making a Reservation. At this stage, we reserve a hotel room for the customer based on the customer’s choice given to us either through the telephone or our website.

	•	Confirmation. For hotels with which we have a guaranteed allotment arrangement, we give instant confirmation, and we notify the hotel afterwards. For hotels with which we have an on-request arrangement, we pass our customer’s reservation request to the hotel. Once we receive confirmation from the hotel, our customer service representative will contact the customer to confirm the reservation.

	•	Following Up. We follow up with the hotel regarding the customer’s length of stay and our commission, in accordance with our agreement with the hotel.

Some hotels require our customers to use their credit cards to guarantee the bookings. We have entered into arrangements with a number of financial institutions to allow our customer service center and websites to accept credit card guarantees to enable our customers to complete their reservations.

Air-ticketing. We believe that we are the only provider of air-ticketing services in China with a multi-province airline ticket sales and issuance infrastructure. We have experienced a significant growth in our air-ticketing business since early 2002. We believe that we are currently among the top three air-ticketing agencies in Beijing and Shanghai in terms of sales volume. The following chart shows the airline tickets we sold for the periods indicated.

For Quarters Ended

December 31,

March 31,

June 30,

September 30,

2002*

2003

(in thousands)

Number of airline tickets sold

79.3

111.7

74.4

183.1


*	Meaningful information concerning the number of airline tickets booked during the prior periods is not available.


**	Decrease principally due to the SARS outbreak from March 2003 through June 2003.

We sell airline tickets for all major domestic Chinese airlines, including Air China, China Eastern Airlines, China Southern Airlines and Shanghai Airlines, and many international airlines operating flights that originate from cities in China, such as Northwest Airlines, Air Canada, All Nippon Airways, Dragon Air and Lufthansa.

In every air-ticketing transaction, our customer receives a confirmed seat and pays the ticket delivery agent upon delivery of the ticket. Generally, the customer pays a penalty to the airline if he or she cancels the ticket for the flight.

The airline industry, including airline ticket pricing, is heavily regulated by CAAC. Therefore, we have no discretion in offering discounts on the airline tickets we sell. We generally earn standard commissions paid to air-ticketing service entities similar to us. In addition, we have an arrangement with some of our airline ticket suppliers, whereby our commission per ticket may increase as the volume of our ticket sales for an airline reaches a specified performance target set by the airline.

Our typical air-ticketing transaction involves the following major steps:


	•	Initiating an Inquiry. Our customer either conducts a search on our website or contacts our customer service center to learn more about flights to a destination. The customer learns either through our website or from our customer service representative whether any seats are available.


	•	Making a Reservation. At this stage, we make a confirmed booking of a seat on the customer’s chosen flight.

	•	Ticket Issuance and Delivery. In Beijing and Shanghai, we issue airline tickets through our local ticketing offices. In other cities, we issue airline tickets through local ticketing agencies with whom we have contractual relationships. We have the capability to issue airline tickets in most major cities in China.

	•	Ticket and Commission Settlement. Payment for airline tickets we sell is settled by either of the following methods:


	(1)	In Beijing or Shanghai, the customer pays us simultaneously with the delivery of the ticket. We then deduct our commission and deposit the remaining amount into the billing and settlement plan clearinghouse system, or the BSP system. The airline deducts the fare owed to it from our accounts within the BSP system on a regular basis.

	(2)	In other cities, where we contract with local agents for ticket fulfillment services, the local agents collect their commissions from airlines, and we, in turn, collect our commissions from them on a regular basis.

A customer has the option of picking up a ticket at the ticketing office or requesting a personal delivery. The expected adoption of electronic tickets in lieu of paper tickets by airlines in China may further increase our customer service efficiency and reduce our operating expenses.

Other Products and Services. We also offer the following products and services:


	•	packaged tours;

	•	advertising sales; and

	•	VIP membership cards.

We bundle transportation and hotels in our packaged tours. We sell packaged tours bundled by third-party travel agencies that also include, in most cases, a guided tour. We offer travel-related businesses and other third parties the opportunity to advertise on our websites and in our introductory brochures. Although we sell our VIP membership cards. Our regular customers can get free VIP membership cards once they accumulate enough points from the travel products they purchase through us. Our VIP membership cards allow the cardholders to receive discounts from many restaurants, clubs and bars in major cities in China and enjoy certain priority in obtaining our services.

These products and services accounted for less than 4.0% of our total revenue for the nine months ended September 30, 2003. We view sales of our VIP membership cards as primarily brand-promoting rather than revenue-generating.

Transaction and Service Platform

Our customers can reach us for their travel-related needs through either our toll-free customer service center or our bilingual websites located at www.ctrip.com and www.gotochina.com. For the nine months ended September 30, 2003, transactions executed through our customer service center and website account for approximately 70.0% and 30.0%, respectively, of our total transactions. We believe that the ratio of online transactions to our total transactions will increase as the Internet penetration rate in China grows, and more customers become accustomed to using the Internet as an effective medium for commerce.

Customer Service Center. Our centralized toll-free customer service center is located in Shanghai, China and is operated 24 hours a day and seven days a week. Customers can call our nationwide toll free number to consult with our customer service representatives, receive comprehensive, real-time hotel and flight information and make travel bookings.

Due to the low-cost nature of operating call centers in China, we are able to realize substantial gross profits. The average compensation of our customer service representatives was RMB2,791 (US$337) per

month in October 2003, consisting of a base salary and fringe benefits of approximately RMB1,551 (US$187) plus commissions based on the number of transactions completed during the month. In October 2003, each customer service representative received approximately 2,425 calls on average. Accordingly, the average labor cost per call was approximately RMB1.15 (US$0.14) in October 2003.

Our customer service center has 30 telephone lines, each of which is connected to eight extensions. As a result, our customer service center has the capacity to receive 240 incoming calls at once. At our technically advanced facility, we have implemented comprehensive performance measures to monitor our calls to ensure that our customers will receive quality service. We are able to take substantially all of the incoming calls with limited number of aborted calls due to unacceptably long waiting time. We have sufficient capacity to meet further increases in call volume without the need to undertake system redesign to our existing systems. Nevertheless, if we exceed this capacity, we believe we can add, within a reasonable time and at a reasonable cost, additional phone lines and computer systems to handle increasing call volumes.

We currently employ over 500 customer service representatives, all of whom participated in a formal training program before commencing work. These representatives efficiently access our information systems on behalf of customers to review a comprehensive list of the hotels and prices in individual markets, the flights to specified destinations and the related price information, while simultaneously advising our customers and making reservations for them. Unlike some companies in the U.S. that outsource their customer service to third-party call centers, our customer service representatives are in-house travel specialists. We continually review staffing needs and train representatives to handle increased call volumes to ensure the long-term sustainability of our business.

Internet Websites. We have a Chinese-language website located at www.ctrip.com and an English-language website located at www.gotochina.com. Our proprietary booking software is integrated with our websites, allowing a customer to complete a booking within minutes.

Through our user-friendly Chinese language website, our customers can:


	•	quickly review pricing and availability of hotels and flights;

	•	book hotel accommodations and airline tickets; and

	•	search and book our packaged tours.

In addition, our customers can use our editorial content for researching destinations and travel tips. Some examples of the content on www.ctrip.com include:


	•	Destination Guide. We feature extensive editorial content covering over 100 popular destinations in China and over 25 popular destinations abroad, and provide destination-related information such as local attractions, transportation, dining, lodging, entertainment, shopping and climate.

	•	Customer-Generated Content. We publish articles, travelogues and pictures by our customers about specific destinations.

	•	Travel News. We provide regularly updated information on fare sales, changing travel conditions and weather advisories.

	•	Links to Other Websites. We offer our customers a selection of links to useful travel-related and websites.

	•	Other Useful Information. Other travel-related information we provide includes train schedule, currency converter, travel tips and health tips.

We have also created an online travel community on www.ctrip.com. Some features of our online community include:


	•	Chat Rooms. Our website visitors can communicate directly with one another in our online chat rooms.


	•	Bulletin Boards. Travelers looking for travel companions and advice from fellow travelers can post their questions and answers on bulletin boards.

	•	Travelers’ Tips. Our website also contains travelers’ feedback on major domestic and international destinations.

Our English-language website, www.gotochina.com, features editorial content similar to www.ctrip.com.

Marketing and Brand Awareness

Through on-site promotions, strategic alliances, online marketing, advertising, media promotions, telemarketing and our customer reward program, we have created a strong Ctrip brand that is commonly associated in China with value travel products and services and superior customer service. We will continue to use our focused marketing strategy to further enhance our Ctrip brand and acquire new customers.

On-Site Promotions. We have over 300 on-site promotion staff located in about 30 major cities in China. All of our on-site promotions staff have participated in a formal training program to learn how to market our products and services and promote our brand in an appropriate and effective way. Our staff distribute membership cards and introductory brochures at various locations including airports and train and bus stations. To date, our on-site promotions have proven to be an effective marketing channel for us.

Cross-Marketing. We have entered into cross-marketing relationships with major Chinese domestic airlines including Air China, China Southern Airlines, China Eastern Airlines, Shanghai Airlines, Hainan Airlines, Shenzhen Airlines and Shandong Airlines, wireless service providers including China Mobile and China Unicom, and banks including Bank of China, China Merchant Bank, Hang Seng Bank and Bank of Communications.

Our airline partners recommend our products and services to their mileage program members, and allow their members to accrue miles by staying at hotels booked through us. Our wireless service provider partners direct their subscribers requesting travel information to our customer service center through automatic call forwarding, or to our websites through an Internet link on their websites. In addition, our bank partners recommend our products and services to their debit or credit card holders, and we allow their debit or credit card holders to use their cards to settle their payments for travel products purchased from us.

Online Marketing. Our Chinese language website, www.ctrip.com, is among the most accessed and used online travel website in China. We pay many of the leading Internet search engines and portals in China to prominently feature our websites.

Advertising. We advertise in in-flight videos and magazines of several domestic airlines in China. Based on our experience, such advertising is one of the most effective advertising methods for increasing brand awareness and attracting new customers.

Media Promotion. We cultivate relationships with a variety of media outlets, including newspapers, magazines and television. Our company and our services have been featured by such media outlets as CCTV, the Chinese Entrepreneurs and the China Travel Journal.

Telemarketing. We have over 40 in-house telemarketing staff who call on prospective customers to introduce our products and services, and our infrequent customers to update them on our developments and encourage them to use our services more often.

Customer Reward Program. To secure our customers’ loyalty and further promote our Ctrip brand, we provide our customers with a customer reward program. This program allows our customers to accumulate membership points calculated according to the services purchased by the customers. Our customers may then redeem these points for travel awards and other gifts.

Supplier Relationship Management

We cultivate and maintain strong relationships with our travel suppliers. We have over 70 employees dedicated to enhancing our existing travel supply arrangements and developing relationships with prospective travel suppliers. We prominently feature some of our hotel suppliers with which we have favorable arrangements on our Chinese language websites as “specially recommended hotels.” Furthermore, we have developed an electronic confirmation system that enables participating hotel suppliers to receive our customer’s reservation information instantly and confirm such reservation through our online interface with the hotel supplier. We believe that the electronic confirmation system is a cost-effective and convenient way for hotels to interface with us, and we intend to promote the system with more hotel suppliers.

Since our inception, we have not had any material disputes with our travel suppliers with respect to the amount of commissions to which we were entitled. We generally renew supply agreements with almost all of our travel suppliers once the initial term of such agreements expires.

Technology and Infrastructure

We believe that the quality of our technology differentiates us from our competitors in China. Our goal has been to build a reliable, scalable, updated and secure infrastructure to fully support our customer service center and website operations.

Since inception, we have supported substantial growth in our offline and online traffic and transactions with our present architecture. Our proprietary booking software is integrated with our websites and customer service center operations. Our hardware platform for the Internet consists of Hewlett-Packard and Dell servers. We have contracted with Avaya Inc., Hewlett-Packard Company and Dell Inc. for warranty services for our hardware platform. We maintain our database on HP DL740 G2, HP LXR8500, HP LH6000 and Dell PowerEdge 6500 and conduct daily backup functions for off-site storage. We access the Internet backbone via a 100 megabit ethernet line. Our customer service center operations are managed by an Avaya G3Si switch. We maintain all of our servers at our premises in Shanghai. As of October 31, 2003, we employed 27 technical support staff to maintain our current technology infrastructure and develop new software features to further enhance the functionality of our transaction and service platform.

Competition

We compete primarily with other consolidators of hotel accommodations and flight reservation services, such as www.elong.com. We also compete with traditional travel agencies. We believe that the hotel room booking volume of our main competitor, www.elong.com, is significantly lower than ours. However, as the travel business in China continues to grow, we may face competition from new players in the hotel consolidation market in China and foreign travel consolidators that may enter the China market, such as expedia.com and hotels.com.

We believe that among air-ticketing intermediaries in China, we have a unique multi-province airline ticket sales and fulfillment infrastructure. While we have local competitors in various markets, so far we have no national competitor in our air-ticketing business. In the markets where we face local competition, our competitors generally conduct ticketing transactions in person, and not over the Internet or through customer service centers. Many local air-ticketing agencies are primarily involved in the wholesale business that sell airline tickets to businesses rather than individual travelers, who are our targeted customers. However, as the airline ticket distribution business continues to grow in China, we believe that the companies already involved in the travel services industry may increase their efforts to develop their services that compete with our air-ticketing business.

Intellectual Property

Our intellectual property rights include trademarks and domain names associated with the name “Ctrip” and copyright and other rights associated with our websites, technology platform, booking software and other aspects of our business. We regard our intellectual property as a factor contributing to our success,

although we are not dependent on any patents, intellectual property related contracts or licenses other than some commercial software licenses available to the general public. We rely on trade mark and copyright law, trade secret protection, noncompetition and confidentiality agreements with our employees to protect our intellectual property rights. We require our employees to enter into agreements to keep confidential all information relating to our customers, methods, business and trade secrets during and after their employment with us. Our employees are required to acknowledge and recognize that all inventions, trade secrets, works of authorship, developments and other processes made by them during their employment are our property.

We have registered our domain names www.ctrip.com and www.gotochina.com with www.register.com and www.opensrs.net, respectively, and the domain name www.ctrip.com.cn with China Internet Network Information Center, a domain name registration service in China, and have full legal rights over these domain names. We conduct our business under the Ctrip brand name and logo. We have registered the trademarks “Ctrip” and “ (CHINESE CHARACTER) ” with the Trade Mark Office of the People’s Republic of China State General Administration for Industry and Commerce. We have also registered the trademark “ (CHINESE CHARACTER) ” with the Registrar of Trade Marks in Hong Kong.

Employees

As of October 31, 2003, we had 1,420 employees, including 124 in management and administration, 554 in our customer service center, 354 in sales and marketing, and 388 in product development including supplier management personnel and technical support personnel. None of our employees is represented by a labor union. We consider our relations with our employees to be good.

Facilities

Our customer service center, principal sales, marketing and development facilities and administrative offices are located on premises comprising approximately 3,737 square meters in an industry park in Shanghai, China. We own 2,514 square meters of our premises and lease the remaining area of our premises from a company controlled by the spouse of our Chief Executive Officer, James Jianzhang Liang. We have branch offices in Hong Kong, Beijing, Guangzhou and Shenzhen. We also maintain a network of sales offices in about 30 cities in China. We believe that we will be able to obtain adequate facilities, principally through the leasing of appropriate properties, to accommodate our future expansion plans.

Legal Proceedings

We are not a party to any litigation and are not aware of any pending or threatened litigation.

CHINESE GOVERNMENT REGULATIONS

Current Chinese laws and regulations impose substantial restrictions on foreign ownership of the air-ticketing, travel agency, advertising and Internet content provision businesses in China. As a result, we conduct these businesses in China through contractual arrangements with our affiliated Chinese entities as well as certain independent air-ticketing agencies and travel agencies. Our director, Qi Ji, and our officers, Min Fan and Alex Nanyan Zheng, all of whom are Chinese citizens, own all or substantially of the equity in our affiliated entities.

In the opinion of our Chinese counsel, Commerce & Finance Law Offices, the ownership structures, businesses and operations of our subsidiaries and affiliated entities in China comply with all existing Chinese laws, rules and regulations. In addition, no consent, approval or license other than those already obtained is required under the existing Chinese laws, rules and regulations for such ownership structures, businesses and operations or this offering.

Restrictions on Foreign Ownership

Air-ticketing. The principal regulation governing foreign ownership of air-ticketing businesses in China is the Foreign Investment Industrial Guidance Catalogue (2002). Under this regulation, a foreign investor cannot own more than 50% of an air-ticketing agency in China.

Travel Agency. The principal regulation governing foreign ownership of travel agencies in China is the Establishment of Foreign-controlled and Wholly Foreign-owned Travel Agencies Tentative Provisions (2003). Recently, qualified foreign investors have been permitted to establish or own a travel agency in Beijing, Shanghai, Guangzhou, Shenzhen or Xian, upon the approval of the Chinese government, subject to considerable restrictions as to its scope of business. For example, foreign travel agencies cannot arrange for the travel of persons from mainland China to Hong Kong, Macau, Taiwan or any other country. In addition, foreign travel agencies cannot establish branches.

Advertising. The principal regulation governing foreign ownership of advertising agencies in China is the Foreign Investment Industrial Guidance Catalogue (2002). Under these regulations, foreign investors cannot own more than 49% of an advertising agency in China.

Internet Content Providers. The principal regulations governing foreign ownership of the Internet content provision business in China include:


	•	Administrative Rules for Foreign Investments in Telecommunications Enterprises (2001); and

	•	Foreign Investment Industrial Guidance Catalogue (2002).

Under these regulations, a foreign entity is prohibited from owning more than 50.0% of a Chinese entity that provides value-added telecommunications services, which includes Internet content provider services.

General Regulation of Businesses

Air-ticketing. The air-ticketing business is subject to the supervision of CAAC and its regional branches. The principal regulation governing air-ticketing in China is the Administration on Civil Aviation Transporting Marketing Agency Business Regulations (1993).

Under these regulations, an air-ticketing agency must obtain a permit from CAAC or its regional branch in every city in which the agency proposes to conduct the air-ticketing business. There are two types of air-ticketing permits in China: permits for selling tickets for international flights and flights to Hong Kong, Macau and Taiwan, and permits for selling tickets for domestic flights in China.

Travel Agency. The travel industry is subject to the supervision of the China National Tourism Administration and local tourism administrations. The principal regulations governing travel agencies in China include:


	•	Administration of Travel Agencies Regulations (1996), as amended; and

	•	Administration of Travel Agencies Regulations Implementing Rules (2001).

Under these regulations, a travel agency must obtain a license from the China National Tourism Administration in order to conduct the cross-border travel business, and a license from the provincial-level tourism administration in order to conduct the domestic travel agency business.

Advertising. The State General Administration of Industry and Commerce is responsible for regulating advertising activities in China. The principal regulations governing advertising (including online advertising) in China include:


	•	Advertising Law (1994); and

	•	Administration of Advertising Regulations (1987).

Under these regulations, any entity conducting advertising activities must obtain an advertising permit from the local Administration of Industry and Commerce.

Internet Content Provision Service and Online Commerce. Our provision of travel-related content on our websites is subject to Chinese laws and regulations relating to the telecommunications industry and Internet, and regulated by various government authorities, including the Ministry of Information Industry and the State General Administration of Industry and Commerce. The principal regulations governing the telecommunications industry and Internet include:


	•	Telecommunications Regulations (2000);

	•	The Administrative Measures for Telecommunications Business Operating Licenses (2001); and

	•	The Internet Information Services Administrative Measures (2000).

Under these regulations, Internet content provider services are classified as value-added telecommunications businesses, and a commercial operator of such services must obtain an Internet content provision license from the appropriate telecommunications authorities in order to carry on any commercial Internet content provision operations in China.

With respect to online commerce, there are no specific Chinese laws at the national level governing online commerce or defining online commerce activities, and no government authority has been designated to regulate online commerce. There are existing regulations governing retail business that require companies to obtain licenses in order to engage in the business. However, it is unclear whether these existing regulations will be applied to online commerce.

Regulation of Foreign Currency Exchange and Dividend Distribution

Foreign Currency Exchange. The principal regulation governing foreign currency exchange in China is the Foreign Currency Administration Rules (1996), as amended. Under the Rules, RMB is freely convertible for trade and service-related foreign exchange transactions, but not for direct investment, loan or investment in securities outside China unless the prior approval of the State Administration for Foreign Exchange of the People’s Republic of China is obtained.

Pursuant to the Foreign Currency Administration Rules, foreign investment enterprises in China may purchase foreign exchange without the approval of the State Administration for Foreign Exchange of the People’s Republic of China for trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They may also retain foreign exchange (subject to a cap approved by the State Administration for Foreign Exchange of the People’s Republic of China) to satisfy

foreign exchange liabilities or to pay dividends. In addition, if and when they acquire companies in China, such acquired companies will also become foreign investment enterprises. However, the relevant Chinese government authorities may limit or eliminate the ability of foreign investment enterprises to purchase and retain foreign currencies in the future. In addition, foreign exchange transactions for direct investment, loan and investment in securities outside China are still subject to limitations and require approvals from the State Administration for Foreign Exchange of the People’s Republic of China.

Dividend Distribution. The principal regulations governing distribution of dividends of foreign holding companies include:


	•	The Foreign Investment Enterprise Law (1986), as amended; and

	•	Administrative Rules under the Foreign Investment Enterprise Law (2001).

Under these regulations, foreign investment enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, foreign investment enterprises in China are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds. These reserves are not distributable as cash dividends.

MANAGEMENT

Directors and Executive Officers

The following table sets forth information regarding our directors and executive officers as of November 24, 2003.


Directors and Executive Officers	Age		Position/Title

James Jianzhang Liang		33	Co-founder; Chairman of the Board; Chief Executive Officer
Neil Nanpeng Shen		35	Co-founder; President; Chief Financial Officer; Director
Gabriel Li(1)(2)		35	Deputy Chairman of the Board
JP Gan(1)(3)		31	Director
Suyang Zhang(2)(5)		44	Director
Yufei Hu(2)(4)		33	Director
Junichi Goto(1)(6)		49	Director
Qi Ji		37	Co-founder; Director
Robert Stein(1)(2)		42	Director
Min Fan		38	Co-founder; Executive Vice President
Victor Shengli Wang		48	Vice President
Alex Nanyan Zheng		34	Vice President
Han Ding		35	Vice President
Jianmin Zhu		34	Vice President


(1)	Member of Audit Committee.
(2)	Member of Compensation Committee.
(3)	Appointed by Carlyle Asia Venture Partners I, L.P.
(4)	Appointed by S.I. Technology Venture Capital Limited.
(5)	Appointed by IDG Technology Venture Investment, Inc. and IDG Technology Venture Investments, L.P.
(6)	Appointed by China Enterprise Investments No. 11 Limited.

James Jianzhang Liang is one of the co-founders of our company. Mr. Liang has served as Chief Executive Officer since 2000 and a member of our board of directors since our inception. He has been Chairman of our board since August 2003. Prior to founding Ctrip, Mr. Liang held a number of technical and managerial positions with Oracle Corporation from 1991 to 1999 in the U.S. and China, including the head of the ERP consulting division of Oracle China from 1997 to 1999. Mr. Liang currently serves on the board of Home Inns Beijing. Mr. Liang received his Master’s and Bachelor’s degrees from Georgia Institute of Technology. He also attended an undergraduate program at Fudan University.

Neil Nanpeng Shen is one of the co-founders of our company. Mr. Shen has served as Chief Financial Officer since 2000 and executive director since our inception. He became President of our company in August 2003. Prior to founding Ctrip, Mr. Shen had worked for more than eight years in the investment banking industry in New York and Hong Kong. He was a director at Deutsche Bank Hong Kong where he worked from 1996 to 1999. Prior to 1996, he had worked at Chemical Bank, Lehman Brothers and Citibank in various investment banking areas. Mr. Shen is currently Deputy Chairman of Home Inns. Mr. Shen received his Master’s degree from the School of Management at Yale University and his Bachelor’s degree from Shanghai Jiao Tong University.

Gabriel Li has served at different times on our board of directors since 2000. Mr. Li has been Deputy Chairman of our board since August 2003. Mr. Li is a managing director of Orchid Asia Management Co., LLC. Mr. Li was a managing director of The Carlyle Group from December 2002 to October 2003. Prior to

rejoining The Carlyle Group, he was a managing director of Robertson Stephens Private Equity Growth in San Francisco in 2002. Prior to that, Mr. Li had worked as a director at The Carlyle Group from 2000 to 2002, a partner at Orchid Asia Holdings, LLC from 1997 to 2000 and an associate at McKinsey & Co. in Hong Kong and Los Angeles from 1994 to 1997. Mr. Li graduated summa cum laude from the University of California at Berkeley and received his Masters of Science from the Massachusetts Institute of Technology and Masters of Business Administration from the Stanford Business School.

JP Gan has served as our director since 2002. Mr. Gan is a Vice President of The Carlyle Group responsible for venture investment activities in the Greater China region. Prior to joining The Carlyle Group in 2000, Mr. Gan worked at the investment banking division at Merrill Lynch, in Hong Kong from 1999 to 2000 and the then Price Waterhouse in the United States from 1994 to 1997. Mr. Gan obtained his Masters of Business Administration from the University of Chicago Graduate School of Business and his Bachelor of Business Administration from the University of Iowa. He is a Certified Public Accountant in the United States.

Suyang Zhang has served as our director since December 1999. Mr. Zhang is currently a Vice President of IDG Technology Venture Investment Inc., where he has worked since 1996, and General Manager of Shanghai Pacific Technology Venture Fund Co., Ltd., where he has worked since 1994. Mr. Zhang has led his firms’ investments in a number of high-tech projects in the areas of electronics, telecommunications and software in recent years. He previously served as a division manager of Shanghai Bell, deputy director of Shanghai Telephone Equipment Manufacturing Company, and general manager of Shanghai Vantone Industrial Co. Ltd. He currently serves on the boards of several companies, including Home Inns and Baud Data Communications Co., Ltd. Mr. Zhang holds a Bachelor of Electronics Engineering from Shanghai University, an Executive Masters of Business Administration from China European International Business School.

Yufei Hu has served as our director since 2002. Mr. Hu has been a partner at Shanghai Synergy Venture Capital Management Co., Ltd. since 1999. From 1996 to 1999, he was a manager in the investment department of S.I. Capital Ltd. Mr. Hu worked at Daqing Oilfield Administration Bureau from 1991 to 1994. Mr. Hu received his Master’s degree in Business Administration from the School of Management, Fudan University and his Bachelor’s degree from Heilongjiang University.

Junichi Goto has served as our director since 2000 and has more than 23 years of experience in direct investment and investment banking. Mr. Goto is also the Chairman and Chief Executive Officer of Go-To-Asia Investment Limited. Between June 1999 and June 2001, he served as a Director of Softbank China Venture Investments Limited, the venture investment arm of SOFTBANK CORP., and between March 2000 and April 2001, he was the President and Executive Director of Softbank Investment International (Strategic) Limited, a Hong Kong listed company. Mr. Goto also served as a director of Softech Investment Management Company Limited, the fund manager of the Hong Kong Government Applied Research Fund. Prior to joining SOFTBANK CORP., Mr. Goto had been with the Nomura Group and headed various divisions in investment banking and private equities. He holds a Bachelor’s degree in economics from the University of Tokyo.

Qi Ji is one of the co-founders of our company. He has served as our director since our inception. Mr. Ji has been the Chief Executive Officer of Home Inns since early 2002. He was the President of our Company from 1999 to early 2002. Prior to founding Ctrip, he served as Chief Executive Officer of Shanghai Sunflower High-Tech Group which he founded in 1997. He headed the East China Division of Beijing Zhonghua Yinghua Intelligence System Co., Ltd. from 1995 to 1997. He received both his Master’s and Bachelor’s degrees from Shanghai Jiao Tong University.

Robert Stein is the Chief Executive Officer and Chairman of Adelphi Capital Partners. Prior to establishing Adelphi, Mr. Stein was the Chief Executive Officer of Deutsche Bank Group Asia Pacific. He served on Deutsche Bank’s Global Institution Board from 1999 to 2000 and the Global Wealth Management Board from 2000 to 2002. Prior to joining Deutsche Bank, Mr. Stein worked for Merrill Lynch from 1985 to 1995, including as Head of Capital Markets, Asia and member of Merrill Lynch’s Global Debt and Equity Management Committee. Currently, Mr. Stein is a member of the Singapore Government’s Economic

Review Committee as Chair of the Financial Services Working Group. Until October 2003, he was a director of the Singapore Stock Exchange. Mr. Stein holds a Bachelor’s degree in Philosophy and Biochemistry from Dartmouth College and a Master’s degree in International and Development Economics from University College, Oxford University.

Min Fan is one of the co-founders of our company. He has served as our Executive Vice President since 2000. Mr. Fan has more than 13 years of experience in travel-related industries. From 1997 to 2000, he was the Chief Executive Officer of Shanghai Travel Service Company, a leading domestic travel agency in China. From 1990 to 1997, he served as the Deputy General Manager and in a number of other senior positions at Shanghai New Asia Hotel Management Company, which was one of the leading hotel management companies in China. Mr. Fan obtained his Master’s and Bachelor’s degrees from Shanghai Jiao Tong University. He also studied at the Lausanne Hotel Management School of Switzerland in 1995.

Victor Shengli Wang has served as our Vice President and the General Manager of our Beijing branch since 2000. In 1997, Mr. Wang co-founded Beijing Modern Express Co. Ltd., which we acquired in October 2000. From 1991 to 1997, Mr. Wang was the head of the General Plan Division of China Lantian Industrial Company. He holds a Bachelor’s degree from Xian Electronics Science & Technology Institute.

Alex Nanyan Zheng has served as our Vice President since 2000 and currently is also our General Manager in charge of Southern and Southwestern China operations. From 1993 to 2000, Mr. Zheng was co-founder and deputy general manager of Guangzhou Wanxun (Armitage) Computer Software Limited, a hotel management information system provider in China. Previously, Mr. Zheng worked at the computer center of Guangdong Provincial Economic and Trade Commission. He obtained his Bachelor’s degree from Zhongshan University in China.

Han Ding has served as our Vice President in charge of our air-ticketing business since March 2002. Prior to joining us, Mr. Ding was chief executive officer of Beijing Hai’an Air-ticketing Service Company, Ltd. which he founded in 1995. Previously, he was secretary and director of the Hai’an Industry Group of Companies. Mr. Ding obtained his Master’s degree in Business Administration from the Huazhong University of Science and Technology in China and his Bachelor’s degree from Anhui Institute of Finance and Trade in China.

Jianmin Zhu has served as our Vice President and Head of Business Operations since 2003. Prior to joining us, he worked with several software and system integration companies, including Compaq and RPTI International Ltd. He was a senior consultant at Compaq from 1999 to 2000 and technical director of RPTI International Ltd. from 1995 to 1998. Mr. Zhu received his Bachelor’s degree from Shanghai Jiao Tong University.

Board of Directors

Our board of directors currently consists of nine directors. Currently, our preferred shareholders have the right to appoint five non-independent directors (as indicated in the table above). The founding shareholders have the right to elect the remaining non-independent directors. Our articles of association allow for two independent directors to be appointed to our board by the holders of a majority of our outstanding ordinary shares on an as converted basis.

Committees of the Board of Directors

Audit Committee. Our audit committee reports to the board regarding the appointment of our independent public accountants, the scope and results of our annual audits, compliance with our accounting and financial policies and management’s procedures and policies relatively to the adequacy of our internal accounting controls.

Compensation Committee. Our compensation committee reviews and makes recommendations to the board regarding our compensation policies and all forms of compensation to be provided to our executive officers and directors. In addition, the compensation committee reviews bonus and stock compensation arrangements for all of our other employees.

We intend to comply with the requirements of the Sarbanes-Oxley Act of 2002 and Nasdaq’s recently proposed corporate governance rules with respect to audit committees and independent directors on or prior to the closing of this offering. We are considering amending the charters of the committees of our board of directors to comply with the Sarbanes-Oxley Act and Nasdaq requirements.

Duties of Directors

Under Cayman Islands law, our directors have a statutory duty of loyalty to act honestly in good faith with a view to our best interests. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association. A shareholder has the right to seek damages if a duty owed by our directors is breached.

Terms of Directors and Officers

All directors hold office until their successors have been duly elected and qualified. A director may only be removed by the shareholders who nominated and elected such director. Officers are elected by and serve at the discretion of the board of directors.

Prior to the closing of this offering, we intend to amend our articles of association to contain provisions that may discourage transactions involving an actual or potential change of control of our company, including dividing our board of directors into three classes, each having a term of three years, with the term of one class expiring each year. This provision would delay the replacement of a majority of our directors and would make changes to the board of directors more difficult than if such provision was not in place.

Compensation of Directors and Executive Officers

For the year ended December 31, 2002, the aggregate cash compensation to our current senior executive officers, James Jianzhang Liang, Neil Nanpeng Shen and Min Fan, was approximately US$402,262, and we did not pay any cash compensation to our non-executive directors. We did not grant any options to acquire our ordinary shares to our directors and executives officers in 2002.

We have not paid any cash compensation to our non-executive directors in 2003. For the nine months ended September 30, 2003, the aggregate cash compensation to our senior executive officers named above was approximately RMB2,350,000 (US$283,916). We granted options to acquire an aggregate of 470,000 ordinary shares to our executive officers as a group over the same period, but did not grant any options to our non-executive directors for the nine months ended September 30, 2003.

Employee’s Stock Option Plans

Our board of directors has adopted two stock option plans, namely, the 2003 Employee’s Option Plan, or the 2003 Plan, and 2000 Employee’s Stock Option Plan, or the 2000 Plan. The terms of the 2003 Plan and the 2000 Plan are substantially similar. The purpose of the Plans is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants and to promote the success of our business. Our board of directors believes that our company’s long term success is dependent upon our ability to attract and retain superior individuals who, by virtue of their ability and qualifications, make important contributions to our business.

2000 Plan to several of our current senior executive officers named below and Qi Ji, a former senior executive officer, and to our other employees as a group since our board of directors adopted the 2000 Plan.

Ordinary Shares

Underlying Options

Date of

Granted

Exercise Price

Date of Grant

Expiration

(US$/Share)

James Jianzhang Liang

144,000

0.7716

April 15, 2000

April 15, 2005

Neil Nanpeng Shen

144,000

0.7716

April 15, 2000

April 15, 2005

Min Fan

172,800

0.7716

April 15, 2000

April 15, 2005

Qi Ji

129,600

0.7716

April 15, 2000

April 15, 2005

Other employees as a group

945,360

0.7716

April 15, 2000 to
January 1, 2003

April 15, 2005 to
January 1, 2010

Total

1,535,760

We have reserved an aggregate of 1,187,510 of our ordinary shares for issuance under the 2003 Plan, of which 980,640 options are issued and outstanding. The following table summarizes, as of November 24, 2003, the option grants made under our 2003 Plan to several of our directors and senior executive officers named below, and to our other employees since our board of directors adopted the 2003 Plan. The value of the options granted in October and November 2003, based on the midpoint of the filing range set forth on the front cover of this prospectus, is US$427,220.

Ordinary Shares

Underlying Options

Date of

Granted

Exercise Price

Date of Grant

Expiration

(US$/Share)

James Jianzhang Liang

230,000

2.11

April 15, 2003

April 15, 2008

Neil Nanpeng Shen

120,000

2.11

April 15, 2003

April 15, 2008

Min Fan

120,000

2.11

April 15, 2003

April 15, 2008

Gabriel Li

30,000

6.00

October 27, 2003

October 27, 2008

Robert Stein

30,000

6.00

October 27, 2003

October 27, 2008

Other employees

241,660

2.11

April 15, 2003

April 15, 2008

50,000

5.00

October 3, 2003

October 3, 2008

20,000

6.00

October 27, 2003

October 27, 2008

103,980

80% of the
midpoint of the
filing range

October 30, 2003

October 30, 2008

35,000

90% of the
midpoint of the
filing range

November 14, 2003

November 14, 2008

Total

980,640

Termination of Options. Where the option agreement permits the exercise or purchase of the options granted for a certain period of time following the recipient’s termination of service with us, or the recipient’s disability or death, the options will terminate to the extent not exercised or purchased on the last day of the specified period or the last day of the original term of the options, whichever occurs first.

Administration. Our stock option plans are administered by our board of directors or a committee designated by our board of directors constituted to comply with applicable laws. In each case, our board of directors or the committee it designates will determine the provisions, terms and conditions of each option grant, including, but not limited to, the option vesting schedule, repurchase provisions, rights of first refusal,

forfeiture provisions, form of payment upon settlement of the award, payment contingencies and satisfaction of any performance criteria.

Vesting Schedule. One-third of the options granted under our stock option plans vest 12 months after a specified vesting commencement date; an additional one-third vest 24 months after the specified commencement date and the remaining one-third vest 36 months after the specified commencement date, subject to the optionee continuing to be a service provider on each of such dates.

Option Agreement. Options granted under our stock option plans are evidenced by an option agreement that contains, among other things, provisions concerning exercisability and forfeiture upon termination of employment or consulting arrangement (by reason of death, disability or otherwise), as determined by our board. In addition, the option agreement also provides that options granted under each Plan are subject to a 180-day lock-up period following the effective date of a registration statement filed by us under the Securities Act, if so requested by us or any representative of the underwriters in connection with any registration of the offering of any of our securities.

Transfer Restrictions. Incentive stock options for the ordinary shares to be issued upon exercise of and right to purchase ordinary shares may not be transferred in any manner by the optionee other than by will or the laws of succession and are exercisable during the lifetime of the optionee only by the optionee.

Option Exercise. The term of options granted under the 2000 Plan may not exceed ten years from the date of grant. The term of options granted under the 2003 Plan may not exceed five years from the date of grant. The consideration to be paid for our ordinary shares upon exercise of an option or purchase of shares underlying the option will be determined by the stock option plan administrator and may include cash, check, ordinary shares, a promissory note, consideration received by us under a cashless exercise program implemented by us in connection with our stock option plans, or any combination of the foregoing methods of payment.

Third-Party Acquisition. If a third party acquires us through the purchase of all or substantially all of our assets, a merger or other business combination, all outstanding options or share purchase rights will be assumed or equivalent options or rights substituted by the successor corporation or parent or subsidiary of successor corporation. In the event that the successor corporation refuses to assume or substitute for the options or share purchase rights, all options or share purchase rights will become fully vested and exercisable immediately prior to such transaction and all unexercised awards will terminate unless, in either case, the awards are assumed by the successor corporation or its parent.

Termination of Plans. Unless terminated earlier, the 2003 Plan will terminate automatically in 2008 and the 2000 Plan will terminate automatically in 2010. Our board of directors has the authority to amend or terminate our stock option plans subject to shareholder approval to the extent necessary to comply with applicable law. However, no such action may (i) impair the rights of any optionee unless agreed by the optionee and the stock option plan administrator, or (ii) affect the stock option plan administrator’s ability to exercise the powers granted to it under our stock option plans.

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth information with respect to the beneficial ownership of our ordinary shares, on a fully diluted basis assuming conversion of all of our preferred shares and taking into account the aggregate number of ordinary shares underlying our outstanding options, as of November 24, 2003, by:



	(1) each of our directors and senior executive officers;


	(2) each person known to us to own beneficially more than 5.0% of our ordinary shares; and

	(3) each other selling shareholder.



	Ordinary Shares									Shares Beneficially
	Beneficially Owned					Shares Being Sold in				Owned After This
	Prior to This Offering					This Offering				Offering

Name	Number(1)		%(2)			Number		%		Number(1)		%

Directors and Senior Executive Officers:
Neil Nanpeng Shen(3)		2,854,924		10.52	%		380,261		12.68%		2,474,663		7.60%
James Jianzhang Liang(4)		2,317,238		8.54	%		285,202		9.51%		2,032,036		6.24%
Qi Ji(5)		2,072,838		7.64	%		285,202		9.51%		1,787,036		5.49%
Victor Shengli Wang(6)		745,907		2.75	%		82,469		2.75%		663,438		2.04%
Min Fan(7)		706,057		2.60	%		60,652		2.02%		645,405		1.98%
Gabriel Li(8)		64,104		0.24	%		—		—		64,104		0.20%
Robert Stein(9)		30,000		0.11	%		—		—		30,000		0.09%
All directors and executive officers as a group of 7 persons(10)		8,791,068		32.38	%		1,093,786		36.46%		7,697,282		23.65%
Principal Shareholders:
Carlyle Offshore Partners II, Limited(11)		6,981,267		25.72	%		1,024,614		34.15%		5,956,653		18.30%
Tiger Technology Private Investment Partners, L.P.(12)		2,180,755		8.03	%		—		—		2,180,755		6.70%
IDG Technology Venture Investment, Inc.(13)		1,989,110		7.33	%		291,934		9.73%		1,697,176		5.21%
S.I. Technology Venture Capital Limited(14)		1,571,958		5.79	%		230,710		7.69%		1,341,248		4.12%
Other Selling Shareholders:
China Enterprise Investments No. 11 Limited(15)		1,312,506		4.83	%		192,631		6.42%		1,119,875		3.44%
Ecity Investment Limited(16)		875,004		3.22	%		128,421		4.28%		746,583		2.29%
Jing Dong Li(17)		128,435		0.47	%		18,850		0.63%		109,585		0.34%
Xiao Tan(18)		56,191		0.21	%		8,247		0.27%		47,944		0.15%
Ze Sheng Wang(19)		24,082		0.09	%		3,534		0.12%		20,548		0.06%
Openventure Company Limited(20)		17,452		0.06	%		2,561		0.09%		14,891		0.05%
Xi Yuan Fang(21)		16,055		0.06	%		2,356		0.08%		13,699		0.04%
Yu Sun(22)		16,055		0.06	%		2,356		0.08%		13,699		0.04%


(1)	Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to the securities.



(2)	The number of ordinary shares outstanding used in calculating the percentage for each listed person includes the ordinary shares of underlying options held by such persons. Percentage of beneficial ownership is based on 27,147,294 ordinary shares outstanding as of November 24, 2003 on a fully diluted basis, including 1,535,760 options granted under the 2000 Plan and 980,640 options granted under the 2003 Plan.


(3)	Includes 2,590,924 ordinary shares held by Mr. Shen and 264,000 ordinary shares issuable upon exercise of options held by Mr. Shen. The address for Mr. Shen is Unit 2001, The Centrium, 60 Wyndham St., Central, Hong Kong.

(4)	Includes 1,943,238 ordinary shares held by Mr. Liang and 374,000 ordinary shares issuable upon exercise of options held by Mr. Liang. The address for Mr. Liang is 3rd Floor, Block 63, No. 421 Hong Cao Road, Shanghai, PRC.

(5)	Includes 1,943,238 ordinary shares held by Mr. Ji and 129,600 ordinary shares issuable upon exercise of options held by Mr. Ji. The address for Mr. Ji is 3rd Floor, Block 63, No. 421 Hong Cao Road, Shanghai, PRC.

(6)	Includes 561,907 ordinary shares held by Mr. Wang and 184,000 ordinary shares issuable upon exercise of options held by Mr. Wang. The address for Mr. Wang is 6F-G, Block A, Dong Huan Plaza Office Building, No. 9, Dong Zhong Road, Beijing, PRC.

(7)	Includes 413,257 ordinary shares held by Mr. Fan and 292,800 ordinary shares issuable upon exercise of options held by Mr. Fan. The address for Mr. Fan is 3rd Floor, Block 63, No. 421 Hong Cao Road, Shanghai, PRC.


(8)	Includes 26,250 ordinary shares issuable upon conversion of Series A preferred shares, 7,854 ordinary shares issuable upon conversion of Series B preferred shares, and 30,000 ordinary shares issued upon exercise of options held by Mr. Li. The address for Mr. Li is Suite 5180, 555 California Street, San Francisco, CA 94104.



(9)	Includes 30,000 ordinary shares issuable upon exercise of options held by Mr. Stein. The address for Mr. Stein is Level 34 Centennial Tower, 3 Temasek Ave., Singapore 039190.



(10)	Shares owned by all of our directors and executive officers as a group include shares beneficially owned by James Jianzhang Liang, Neil Nanpeng Shen, Min Fan, Qi Ji, Gabriel Li, Robert Stein and Victor Shengli Wang. Shares beneficially owned by our directors and executive officers prior to this offering includes additional options to acquire 1,304,400 ordinary shares. Shares beneficially owned by all of our directors and executive officers after this offering includes options to acquire 758,400 ordinary shares that are exercisable within 60 days of November 24, 2003, all of which will become exercisable upon completion of this offering.



(11)	Includes 6,581,682 ordinary shares issuable upon conversion of Series B preferred shares held by Carlyle Asia Venture Partners I, L.P., or Asia Ventures, and 399,585 ordinary shares issuable upon conversion of Series B preferred shares held by CIPA Co-Investment, L.P., or CIPA. Asia Ventures and CIPA are investment partnerships. The general partner of each of Asia Ventures and CIPA is CIPA General Partner, L.P. The general partner of CIPA General Partner, L.P., is CIPA Ltd., a Cayman Islands limited company which is wholly-owned by TC Group Cayman, L.P. The general partner of TC Group Cayman, L.P. is TCG Holdings Cayman, L.P. The general partner of TCG Holdings Cayman, L.P. is Carlyle Offshore Partners II, Limited, a Cayman Islands limited company. Carlyle Offshore Partners II, Limited, has ultimate voting and dispositive control over the shares held by Asia Ventures and CIPA through its control of TCG Holdings Cayman, L.P. Carlyle Offshore Partners II, Limited is managed by a board of six directors. The directors are William E. Conway, Jr., Daniel A. D’Aniello, David M. Rubenstein, Allan M. Holt, Jerome H. Powell and Bruce E. Rosenblum, each of whom disclaims beneficial ownership of the shares held by Asia Ventures and CIPA. The address for Carlyle Asia Venture Partners I, L.P. and CIPA is Suite 2801, 28th Floor, 2 Pacific Place, 88 Queensway, Hong Kong.



(12)	Includes 2,173,122 ordinary shares issuable upon conversion of Series C preferred shares held by Tiger Technology Private Investment Partners, L.P. and 7,633 ordinary shares issuable upon conversion of


	Series C preferred shares held by Tiger Technology II, L.P. Tiger Technology PIP Performance, L.L.C., or Tiger PIP, is the sole general partner of Tiger Technology Private Investment Partners, L.P. Charles P. Coleman III, a citizen of the United States of America, is the sole managing member of Tiger PIP. Tiger Technology Performance, L.L.C., or Tiger Performance, is the sole general partner of Tiger Technology II, L.P. Charles P. Coleman III is the sole managing member of Tiger Performance. The address for Tiger Technology Private Investment Partners, L.P. and Tiger Technology II, L.P. is 101 Park Avenue, 48th Floor, New York 10178, U.S.A.


(13)	Includes (a) 984,380 ordinary shares; (b) 437,502 ordinary shares issuable upon conversion of Series A preferred shares held by IDG Technology Venture Investment, Inc.; and (c) 567,228 ordinary shares issuable upon conversion of Series B preferred shares held by IDG Technology Venture Investments, L.P. IDG Technology Venture Investment, Inc. is wholly owned by International Data Group, Inc., a Massachusetts corporation, which in turn is majority owned and controlled by Patrick J. McGovern, the chairman and founder of International Data Group, Inc. The address for IDG Technology Venture Investment, Inc. is 15th Floor, One Exeter Plaza, Boston, MA 02116, USA.



(14)	Includes 437,502 ordinary shares issuable upon conversion of Series A preferred shares and 1,134,456 ordinary shares issuable upon conversion of Series B preferred shares held by S.I. Technology Venture Capital Limited. S.I. Technology Venture Capital Limited is 100% owned by Shanghai Industrial Holdings Limited, a Hong Kong company, which in turn is 58% owned by Shanghai Industrial Investment (Holdings) Co., Ltd., or SIIC, a private limited company incorporated in Hong Kong. SIIC is controlled by the Shanghai government. The address for S.I. Technology Venture Capital Limited is P.O. Box 957, Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands.



(15)	Includes 1,312,506 ordinary shares issuable upon conversion of Series A Preferred Shares held by China Enterprise Investments No. 11 Limited. China Enterprise Investments No. 11 Limited is 100% owned by China Enterprise Fund, a Cayman Islands company also known as Global Fund Trust Company. Go-To-Asia Investment Limited, a company incorporated in Hong Kong, is the investment manager of Global Fund Trust Company. Go-To-Asia Investment Limited is directly controlled by its directors, Junichi Goto and Masaaki Miyagawa. The address for China Enterprise Investments No. 11 Limited is Unit 1902B, 60 Wyndham Street, Central, Hong Kong.



(16)	Includes 875,004 ordinary shares issuable upon conversion of Series A preferred shares. Ecity Investment Limited, a British Virgin Islands corporation, is wholly owned by Morningside CyberVentures Holdings Limited, a British Virgin Islands corporation, which is in turn wholly owned by The NTX-II Trust, an Isle of Man Trust, the trustee of which is Verrall Limited, an Isle of Man corporation. Verrall Limited controls indirectly, through The NTX-II Trust, a 100% interest in Ecity Investment Limited, and as a result has the sole power to vote and dispose of the shares of Ctrip.com International, Ltd. held by Ecity Investment Limited. Verrall Limited is controlled by its Board of Directors, consisting of HO Tuen Yee, Peter S.A. Edwards, Richard F.G. Pease and Charles S. Stewart, all of whom expressly disclaim beneficial ownership of the shares held by Ecity Investment Limited. The address for Ecity Investment Limited is 2nd Floor, Le Prince de Galles, 3-5 Avenue des Citronniers, MC 98000 Monaco.



(17)	Includes 128,435 ordinary shares. The address for Jing Dong Li is 6F-G, Block A, Dong Huan Plaza Office Building, No. 9, Dong Zhong Road, Beijing, PRC.



(18)	Includes 56,191 ordinary shares. The address for Xiao Tan is 6F-G, Block A, Dong Huan Plaza Office Building, No. 9, Dong Zhong Road, Beijing, PRC.



(19)	Includes 24,082 ordinary shares. The address for Ze Sheng Wang is 6F-G, Block A, Dong Huan Plaza Office Building, No. 9, Dong Zhong Road, Beijing, PRC.



(20)	Includes 17,452 ordinary shares issuable upon conversion of Series B preferred shares. Openventure Company Limited is 100% owned by its director, Louise Leung. The address for Openventure Company Limited is 4B, 11 Boyce Road, Hong Kong.



(21)	Includes 16,055 ordinary shares. The address for Xi Yuan Fang is 6F-G, Block A, Dong Huan Plaza Office Building, No. 9, Dong Zhong Road, Beijing, PRC.


(22)	Includes 16,055 ordinary shares. The address for Yu Sun is 6F-G, Block A, Dong Huan Plaza Office Building, No. 9, Dong Zhong Road, Beijing, PRC.

Prior to the issuance of our Series B preferred shares in November 2000, Neil Nanpeng Shen, James Jianzhang Liang, Qi Ji, IDG Technology Venture Investments, L.P., and S.I. Technology Venture Capital Limited, owned 21.93%, 16.45%, 16.45%, 12.04% and 3.70%, respectively, of the outstanding shares of our company. Their ownership interests were reduced to 11.97%, 8.98%, 8.98%, 9.19% and 7.26%, respectively, after the issuance of Series B preferred shares, as Carlyle Asia Venture Partners I, L.P. acquired an ownership interest of 32.25%. The ownership interests of Neil Nanpeng Shen, James Jianzhang Liang, Qi Ji, Carlyle Asia Venture Partners I, L.P., S.I. Technology Venture Capital Limited and IDG Technology Venture Investments, L.P. were reduced to 10.52%, 7.89%, 7.89%, 28.34%, 6.38% and 8.08%, respectively, after the issuance of our Series C preferred shares to Tiger Technology Private Investment Partners, L.P. and its affiliate, who together acquired an ownership interest of 8.85%, and partial redemption of our outstanding shares in September 2003. All of the calculations in this paragraph exclude shares underlying outstanding options.

As of the date of this prospectus, approximately 11.3%, 33.3%, 8.4% and 100% of our outstanding ordinary shares, Series A preferred shares, Series B preferred shares and Series C preferred shares, respectively, are held by one, seven, seven and two record holders in the United States, respectively.

Our shareholders are entitled to vote together as a single class on all matters submitted to shareholders vote. No shareholder has different voting rights from other shareholders.

Two of our selling shareholders, namely, Carlyle Asia Venture Partners I, L.P. and CIPA Co-Investment, L.P., have represented to us that they are affiliated with a registered broker-dealer. Based on such shareholders’ representations, we believe that at the time of the purchase of the shares to be offered by them in this offering, each such shareholder had no agreements or understandings, directly or indirectly, with any person to distribute them. Before Carlyle Asia Venture and CIPA Co-Investment purchased our Series B preferred shares in November 2000, they were not affiliated or otherwise related to us. Neither Carlyle Asia Venture nor CIPA Co-Investment is in the business of underwriting securities.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

RELATED PARTY TRANSACTIONS

Arrangements with Affiliated Chinese Entities

Current Chinese laws and regulations impose substantial restrictions on foreign ownership of the air-ticketing, travel agency, advertising and Internet content provision businesses in China. Therefore, we conduct part of our operations in our non-hotel reservation businesses through a series of agreements with our affiliated Chinese entities, which hold the licenses and approvals for conducting the air-ticketing, travel agency, advertising and Internet content provision businesses in China. We do not hold any ownership interest in our affiliated Chinese entities. Qi Ji, who is a co-founder, shareholder and director of our company, Min Fan, who is a co-founder, shareholder and executive vice president of our company, and Alex Nanyan Zheng, who is an officer, are the principal owners of most of the equity in each of our affiliated Chinese entities. Qi Ji and Min Fan own 80% and 20%, respectively, of Beijing Chenhao. Qi Ji and Min Fan own 51% and 49%, respectively, of Ctrip Commerce, which owns 90% of Shanghai Huacheng. Min Fan and Alex Nanyan Zheng own 90% and 10%, respectively, of Guangzhou Guangcheng. Min Fan owns 66% of Shanghai Cuiming.

We believe that the terms of these agreements are no less favorable than the terms that we could obtain from disinterested third parties. The terms of the agreements with the same title between the company and its respective affiliated entities are identical except for the amount of the loans to the shareholders of each entity and the amount of service fees paid by each entity. We believe that Qi Ji, Min Fan and Alex Nanyan Zheng will not receive any personal benefits from these agreements except as shareholders of Ctrip. According to our Chinese counsel, Commerce & Finance Law Offices, these agreements are valid, binding and enforceable under the current laws and regulations of China. The principal terms of these agreements are described below.

Powers of Attorney. Each of Qi Ji, Min Fan and Alex Nanyan Zheng has irrevocably appointed our President and Chief Financial Officer, Neil Nanpeng Shen, as attorney-in-fact to vote on their behalf on all matters they are entitled to vote on, including matters relating to the transfer of any or all of their respective equity interests in our affiliated Chinese entities and the appointment of the chief executive officer of our affiliated Chinese entities. The appointment of Mr. Shen as the attorney-in-fact will terminate if he is no longer employed by one of our subsidiaries in China. The term of each of the powers of attorney is ten years.

Exclusive Technical Consulting and Services Agreements. We provide our affiliated Chinese entities with technical consulting and related services and staff training and information services. We also maintain their network platforms. We are the exclusive provider of these services. The initial term of these agreements is ten years. In consideration for our services, our affiliated entities agree to pay our service fees as follows: Ctrip Commerce pays us a quarterly fee of RMB240,000 (US$28,996); Beijing Chenhao pays us a monthly fee based on the number of airline tickets sold in the month, at the rate of RMB18.0 (US$2.2) per ticket; Shanghai Huacheng pays us a monthly fee based on the number of packaged-tour products and the number of airline tickets sold in the month, at the rates of RMB60.0 (US$7.3) per tour and RMB20.0 (US$2.4) per ticket; Guangzhou Guangcheng pays us a monthly fee based on the number of airline tickets sold in the month, at the rate of RMB18.0 (US$2.2) per ticket; and Shanghai Cuiming pays us a monthly service fee based on the number of packaged-tour products sold in the month, at the rate of RMB60.0 (US$7.3) per tour. The service fees are subject to quarterly adjustment based on the actual operating results of our affiliated entities.

Share Pledge Agreements. Qi Ji, Min Fan and Alex Nanyan Zheng pledge their respective equity interests in our affiliated Chinese entities as a guarantee for the payment by our affiliated Chinese entities of technical and consulting services fees to us under the exclusive technical consulting and services agreements described above. In the event any of our affiliated entity breaches any of its obligations under the service agreement with us, we are entitled to sell the equity interests held by Qi Ji, Min Fan and/or Alex Nanyan Zheng, as the case may be, and retain the proceeds from such sale or require any of them to transfer his equity interest without consideration to the Chinese citizen(s) designated by us. We will endeavor to enforce our rights in full under the share pledge agreement in the event that any affiliated entity breaches its obligations under the exclusive technical consulting and services agreement with us.

Trademark License Agreements. We grant our affiliated Chinese entities licenses to use our registered trademarks on their websites for a license fee of RMB3,000 (US$362) per year. The terms of these agreements are ten years and may be extended by us for one year.

Software License Agreements. We grant our affiliated Chinese entities the right to use our software for a royalty fee of RMB3,000 (US$362) per year. The terms of these agreements are one year and may be extended by us for one year.

Loan Agreements. Due to government restrictions on foreign ownership of air-ticketing, travel agencies, Internet content provision and advertising businesses in China, we have made loans to Qi Ji, Min Fan and Alex Nanyan Zheng, with the sole and exclusive purpose of providing funds necessary for the capitalization or acquisition of our affiliated entities. In the event that the Chinese government lifts its substantial restrictions on foreign ownership of the air-ticketing, travel agency, advertising or Internet content provision business in China, as applicable, we will exercise our exclusive option to purchase all of the outstanding equity interests of our affiliated Chinese entities, as described in the following paragraph, and the loans will be cancelled in connection with such purchase. However, it is uncertain when, if at all, the Chinese government will lift any or all of these restrictions. The following table sets forth the amount of each loan, the date the loan agreement was entered into, the principal, interest, maturity date and outstanding balance of the loan, the borrower and the affiliated Chinese entity.

Affiliated

Date of Loan Agreement

Borrower

Entity

Principal

Interest

Maturity Date

Outstanding Balance

(in thousands

of RMB)

of US$)

of RMB)

of US$)

September 10, 2003

Min Fan

Beijing
Chenhao

387.4

46.8

None

September 10, 2013

387.4

46.8

September 10, 2003

Qi Ji

Beijing
Chenhao

1,549.5

187.2

None

September 10, 2013

1,549.5

187.2

September 10, 2003

Min Fan

Ctrip
Commerce

980.0

118.4

None

September 10, 2013

980.0

118.4

September 10, 2003

Qi Ji

Ctrip
Commerce

1,020.0

123.2

None

September 10, 2013

1,020.0

123.2

September 10, 2003

Alex Nanyan Zheng

Guangzhou
Guangcheng

50.0

6.0

None

September 10, 2013

50.0

6.0

September 10, 2003

Min Fan

Guangzhou
Guangcheng

450.0

54.4

None

September 10, 2013

450.0

54.4

October 30, 2003

Min Fan

Shanghai Cuiming

4,290.0

518.3

None

October 30, 2013

4,290.0

518.3

Exclusive Option Agreements. As consideration for our entering into the loan agreements described above, each of Qi Ji, Min Fan and Alex Nanyan Zheng has granted us an exclusive, irrevocable option to purchase all of their equity interests in our affiliated Chinese entities at any time we desire, subject to compliance with the applicable Chinese laws and regulations. If we exercise these options, we will cancel the outstanding loans we extended to Qi Ji, Min Fan and Alex Nanyan Zheng to fund our affiliated Chinese entities.

Operating Agreements. We guarantee the performance by our affiliated Chinese entities of contracts, agreements or transactions with third parties relating to the business operations of our affiliated Chinese entities. As consideration for our entering into these performance guarantees, our affiliated Chinese entities pledge their accounts receivable and all of their assets for our benefit. In addition, our affiliated Chinese entities and their shareholders agree not to enter into any transaction that would affect the assets, obligations, rights or operations of our affiliated Chinese entities without our prior written consent. They also agree to accept our guidance with respect to day-to-day operations, financial management systems and the appointment and dismissal of key employees.

All of the agreements described above were entered into in September 2003. Prior to September 2003, we had services agreements with Beijing Chenhao, Shanghai Huacheng and Ctrip Commerce, whereby we rendered consulting, technology, administrative, marketing and other services to them, and issued invoices to them on a monthly basis based on the amount of service fees determined at our sole discretion. These

service agreements have been terminated and replaced with the currently effective exclusive technical consulting and services agreements.

Stock Option Grants

We have granted options to purchase our ordinary shares under the 2000 Plan to our employees, of which 1,535,760 options are outstanding. We will not issue any additional options under the 2000 Plan to our employees. The following table summarizes, as of November 24, 2003, the option grants made under our 2000 Plan to several of our current senior executive officers named below and Qi Ji, a former executive officer, and to our other employees as a group since our board of directors adopted the 2000 Plan.

Ordinary Shares

Underlying Options

Date of

Granted

Exercise Price

Date of Grant

Expiration

(US$/Share)

James Jianzhang Liang

144,000

0.7716

April 15, 2000

April 15, 2005

Neil Nanpeng Shen

144,000

0.7716

April 15, 2000

April 15, 2005

Min Fan

172,800

0.7716

April 15, 2000

April 15, 2005

Qi Ji

129,600

0.7716

April 15, 2000

April 15, 2005

Other employees as a group

945,360

0.7716

April 15, 2000 to
January 1, 2003

April 15, 2005 to
January 1, 2010

Total

1,535,760

Ordinary Shares

Underlying Options

Date of

Granted

Exercise Price

Date of Grant

Expiration

(US$/Share)

James Jianzhang Liang

230,000

2.11

April 15, 2003

April 15, 2008

Neil Nanpeng Shen

120,000

2.11

April 15, 2003

April 15, 2008

Min Fan

120,000

2.11

April 15, 2003

April 15, 2008

Gabriel Li

30,000

6.00

October 27, 2003

October 27, 2008

Robert Stein

30,000

6.00

October 27, 2003

October 27, 2008

Other employees

241,660

2.11

April 15, 2003

April 15, 2008

50,000

5.00

October 3, 2003

October 3, 2008

20,000

6.00

October 27, 2003

October 27, 2008

103,980

80% of the midpoint of the filing range

October 30, 2003

October 30, 2008

35,000

90% of the midpoint of the filing range

November 14, 2003

November 14, 2008

Total

980,640

Private Placements

In March 2000, we sold a total of 4,320,000 shares of Series A preferred shares in a private placement at a price of US$1.0417 per share, including 921,600 shares to Orchid Asia II, L.P., 1,440,000 shares to China Enterprise Investments No. 11 Limited (formerly known as Softbank China Venture Investments No. 11 Limited), 960,000 shares to Ecity Investment Limited, 480,000 IDG Technology Venture Investment, Inc. (formerly known as PTV-China Inc.), 480,000 shares to S.I. Technology Venture Capital Limited and certain individual shareholders. The holders of Series A preferred shares are entitled to vote on an “as converted” basis together with the holders of our ordinary shares. Each Series A preferred share will automatically convert into one ordinary share upon the closing of this offering. Except for IDG Technology Venture, which was also a holder of our ordinary shares, each of the purchasers of our Series A preferred shares was an unrelated third party prior to the issuance and sale of our Series A preferred shares. The value of the Series A preferred shares was determined based on arm’s-length negotiations between us and the purchasers and approved by our board of directors. The purpose of the issuance of our Series A preferred shares was to fund our working capital.

In November 2000, we sold a total of 7,193,464 shares of Series B preferred shares in a private placement at a price of US$1.5667 per share, including 5,106,274 shares to Carlyle Asia Venture Partners I, L.P., 638,285 shares to Softbank Asia Net-Trans (No. 4) Limited, 414,885 shares to IDG Technology Venture Investments, L.P., 829,770 shares to S.I. Technology Venture Capital Limited, 12,765 shares to Openventure Company Limited, 183,826 shares to Orchid Asia II, L.P. and certain individuals. Holders of the Series B preferred shares are entitled to vote on an “as converted” basis together with holders of our ordinary shares and have the right to convert their Series B preferred shares into ordinary shares at a 1 to 1.5 conversion ratio. Each Series B preferred share will automatically convert into 1.5 ordinary shares upon the closing of this offering. Each of the purchasers of our Series B preferred shares, except for those who also held our ordinary shares and Series A preferred shares, was an unrelated third party prior to the issuance and sale of our Series B preferred shares. The value of the Series B preferred shares was determined based on arm’s-length negotiations between us and the purchasers and approved by our board of directors. The purpose of the issuance of our Series B preferred shares was to fund our working capital.

In September 2003, we sold 2,180,755 shares of Series C preferred shares in a private placement at a price of US$4.5856 per share to Tiger Technology Private Investment Partners, L.P. and Tiger Technology II, L.P. A holder of Series C preferred shares is entitled to vote on an “as converted” basis together with holders of our ordinary shares and has the right to convert shares of Series C preferred share into ordinary shares at a 1 to 1 conversion ratio. Each Series C preferred share will automatically convert into one ordinary share upon the closing of this offering. Each of the purchasers of our Series C preferred shares was an unrelated third party prior to the issuance and sale of our Series C preferred shares. The value of the Series C preferred shares was determined based on arm’s-length negotiations between us and the purchasers and approved by our board of directors.

The purposes of the issuance and sale of our Series C preferred shares were to introduce new and well-known investors to facilitate our potential future fund raising efforts and reward our existing shareholders. Immediately after the closing of the sale of our Series C preferred shares, we used the proceeds from such sale to redeem some of our outstanding shares, including 842,938, 382,482 and 636,891 shares of ordinary shares, Series A preferred shares and Series B preferred shares, respectively, at redemption prices of US$4.5282, US$4.5282 and US$6.7924 per share, respectively, after taking into consideration the legal and professional service expenses incurred in connection with the issuance of Series C preferred shares. Each of our then existing shareholders, including our affiliates Carlyle Asia Venture Partners I, L.P., IDG Technology Venture Investment, Inc., S.I. Technology Venture Capital Limited, Neil Nanpeng Shen, James Jianzhang Liang, Min Fan and Qi Ji, participated in our partial redemption of outstanding shares based on the pro rata ownership interest held by such shareholder prior to the issuance and sale of our Series C preferred shares. None of our related parties received any payment for professional services expenses incurred in connection with our issuance and sale of Series C preferred shares.

Shareholders Agreement

We and our existing shareholders entered into a shareholders agreement in September 2003. Pursuant to the shareholders agreement, our board of directors may consist of up to ten members, including two members nominated collectively by Carlyle Asia Venture Partners I, L.P., or Carlyle, and CIPA Co-Investments, L.P., three members nominated by each of the three largest holders of our Series A preferred shares, Series B preferred shares and ordinary shares excluding Carlyle and our founders, respectively, three members nominated by our founders, and two independent directors nominated by holders of a majority of our outstanding shares calculated on an as-converted basis. In addition, holders of our preferred shares are entitled to certain registration rights with respect to any public offering of our ordinary shares, as described in “Description of Share Capital — Registration Rights,” and they have waived such rights in connection with this offering. Holders of our preferred shares also have rights of first refusal to purchase their respective pro rata portion of any new securities issued by us, except in the case of our initial public offering and share issuances under our stock option plans. This right will terminate upon the closing of this offering. We and our shareholders intend to amend the shareholders agreement immediately after the consummation of this offering.

Certain Leased Property in Shanghai

We lease approximately 1,223 square meters of our premises in Shanghai from a company controlled by the spouse of our Chief Executive Officer, James Jianzhang Liang. Our lease term commenced on May 1, 2003 and will expire on February 1, 2005. The annual rent for this lease is RMB500,000 (US$60,408).

DESCRIPTION OF SHARE CAPITAL

As of the date of this prospectus, our authorized share capital consists of 49,157,064 ordinary shares, par value US$0.01 each; 3,937,518 Series A preferred shares, par value US$0.01 each; 6,556,573 Series B preferred shares, par value US$0.01 each; and 2,180,755 Series C preferred shares, par value US$0.01 each. As of the date of this prospectus, there are 8,677,760 ordinary shares issued and outstanding; 3,937,518 Series A preferred shares issued and outstanding; 6,556,573 Series B preferred shares issued and outstanding; and 2,180,755 Series C preferred shares issued and outstanding. All of our issued and outstanding Series A, Series B and Series C preferred shares will automatically be converted into our ordinary shares on a basis of one ordinary share to 1, 1.5 and 1 preference share(s), respectively, upon the closing of this offering.

Between March 2000 and September 2003, we issued and sold shares of our Series A preferred shares, Series B preferred shares and Series C preferred shares in reliance upon Section 4(2) of the Securities Act, and Regulation D and Regulation S promulgated thereunder. Immediately after our issuance and sale of Series C preferred shares, we used the proceeds from such sale to redeem some of our outstanding shares held by our existing shareholders. See “Related Party Transactions — Private Placements.”

We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Law (2003 Revision) of the Cayman Islands, which is referred to as the Companies Law below. Upon the closing of this offering, we will adopt an amended and restated memorandum and articles of association. The following are summaries of (i) material provisions of our proposed amended and restated memorandum and articles of association that we expect will become effective upon the closing of this offering and (ii) the Companies Law, insofar as they relate to the material terms of our ordinary shares.

Ordinary Shares

General. All of our outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form. Our shareholders who are nonresidents of the Cayman Islands may freely hold and vote their shares.

Dividends. The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors subject to the Companies Law.

Voting Rights. Each ordinary share is entitled to one vote on all matters upon which the ordinary shares are entitled to vote. Voting at any meeting of shareholders is by show of hands unless a poll is demanded. A poll may be demanded by the chairman of our board of directors or any other shareholder present in person or by proxy and holding at least ten percent of the shares giving a right to vote at the meeting.

A quorum required for a meeting of shareholders consists of at least two shareholders present or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. Shareholders’ meetings are held annually and may be convened by our board of directors on its own initiative or upon a request to the directors by shareholders holding in the aggregate 10.0% or more of our voting share capital. Advance notice of at least seven days is required for the convening of our annual general shareholders’ meeting and other shareholders meetings.

An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast in a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the ordinary shares. A special resolution is required for matters such as a change of name or amending the memorandum and articles of association. Holders of the ordinary shares may by ordinary resolution, among other things, make changes in the amount of our authorized share capital and consolidate and divide all or any of our share capital into shares of larger amount than our existing share capital and cancel any shares.

Liquidation. On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of shares), assets available for distribution among the holders of ordinary shares shall

be distributed among the holders of our ordinary shares on a pro rata basis. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders proportionately.

Calls on Shares and Forfeiture of Shares. Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

Redemption of Shares. Subject to the provisions of the Companies Law, we may issue shares on the terms that they are, or at our option or at the option of the holders are, subject to redemption on such terms and in such manner as may be determined by special resolution.

Variations of Rights of Shares. All or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Law, be varied either with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.

Differences in Corporate Law

The Companies Law is modeled after that of the United Kingdom but does not follow recent United Kingdom statutory enactments. In addition, the Companies Law differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

Mergers and Similar Arrangements. Cayman Islands law does not provide for mergers as that expression is understood under United States corporate law. However, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement in question is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:


	•	the statutory provisions as to majority vote have been complied with;

	•	the shareholders have been fairly represented at the meeting in question;

	•	the arrangement is such as a businessman would reasonably approve; and

	•	the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law.

When a take-over offer is made and accepted by holders of 90.0% of the shares within four months, the offerer may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection may be made to the Grand Court of the Cayman Islands but is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.

If the arrangement and reconstruction is thus approved, any dissenting shareholders would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

Shareholders’ Suits. We are not aware of any reported class action or derivative action having been brought in a Cayman Islands court. In principle, we will normally be the proper plaintiff and a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in

all likelihood be of persuasive authority in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:


	•	a company is acting or proposing to act illegally or beyond the scope of its authority;

	•	the act complained of, although not beyond the scope of its authority, could be effected duly if authorized by more than a simple majority vote which has not been obtained; and

	•	those who control the company are perpetrating a “fraud on the minority.”

Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences or committing a crime. Our articles of association provide for indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such, except through their own willful neglect or default.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and therefore is unenforceable.

Registration Rights

Under the terms of our shareholders agreements with certain of our shareholders, at any time after the closing of the first firm commitment underwritten public offering of our ordinary shares where the shares are subsequently primarily traded on the Nasdaq National Market or the New York Stock Exchange or other comparable exchange or market place approved by our board of directors, any shareholder(s) holding of record at least 50.0% of registrable shares then outstanding or any permitted assignee of record of such registrable shares may, on three occasions only, require us to effect the registration under the Securities Act of all of the registrable shares that such shareholder(s) request to be registered. Registrable shares consist of (i) ordinary shares issued or to be issued pursuant to conversion of any preferred shares, (ii) any ordinary shares issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, any preferred shares and (iii) any other ordinary shares owned or acquired by any holder of preferred shares. To effect such registration, the registrable shares requested by all holders of registrable shares to be registered must be at least 15.0% of all registrable shares then outstanding. We are not, however, obligated to effect any such registration if we have, within the six-month period preceding the date of any request, already effected a registration under the Securities Act pursuant to (a) a request to exercise another registration right, (b) a request by holders of registrable shares of registration of registrable shares they hold on Form F-3 or (c) the “piggyback” registration right as described below, other than a registration from which the registrable shares of the holders of registrable shares have been excluded (with respect to all or any portion of the registrable shares the holders of registrable shares requested be included in such registration).

Further, any time after the first anniversary of the date of the shareholders agreement, any holder or holders of a majority of all registrable shares then outstanding or any permitted assignees of record of registrable shares may require us to effect a registration on Form F-3 (or any equivalent registration in a jurisdiction outside of the United States) for public sale of all or any portion of the registrable shares held by such holder or holders. We are not, however, obligated to effect any such registration on Form F-3:


	(i) if Form F-3 is not available for such offering by the holders of registrable shares or any permitted assignees of record of registrable shares;

	(ii) if the holders of registrable shares or any permitted assignees of record of registrable shares, together with the holders of any of our other securities entitled to inclusion in such


	registration, propose to sell registrable shares and such other securities (if any) at an aggregate price to the public of less than US$5,000,000;

	(iii) if we furnish to the holders of registrable shares or any permitted assignees of record of registrable shares a certificate signed by our president or chief executive officer stating that in the good faith judgment of our board of directors, it would be materially detrimental to us and our shareholders for such Form F-3 Registration (or equivalent registration in a jurisdiction outside of the United States) to be effected at such time, in which event we have the right to defer the filing of the Form F-3 registration statement (or equivalent registration statement in a jurisdiction outside of the United States) no more than once during any 12-month period for a period of not more than 90 days after receipt of the request of the holder or holders of registrable share or any permitted assignees of record of registrable shares;

	(iv) if we have, within the six-month period preceding the date of such request, already effected a registration under the Securities Act other than a registration from which the registrable shares of holders of registrable shares or any permitted assignees of record of registrable shares have been excluded (with respect to all or any portion of the registration shares the holders of registrable shares requested to be included in such registration) pursuant to the “piggyback” registration right described below; or

	(v) in any particular jurisdiction in which we would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

In addition, holders of registrable shares who are parties to the shareholders agreement have “piggyback” registration rights which may require us to register all or any part of the registrable shares then held by such holders when we file any registration statement under the Securities Act other than a registration statement relating to any employee benefit plan or corporate reorganization.

The foregoing registration rights are subject to certain conditions and limitations, including:


	•	the right of the underwriters in any underwritten offering to limit the number of ordinary shares to be registered for public sale by shareholders; and

	•	our right to delay for up to 90 days during any 12-month period the filing of a registration statement if our board of directors determines that the registration would be seriously materially adverse to us and our shareholders at that time.

We are generally required to bear all of the expenses of all registrations, except underwriting discounts and commissions. Registration of any of the ordinary shares held by shareholders with registration rights would result in those shares becoming freely tradeable without restriction under the Securities Act immediately after the effectiveness of the registration. We have agreed to indemnify the holders of registration rights in connection with demand, Form F-3 and “piggyback” registrations in certain circumstances. Our obligations to register ordinary shares terminate seven years after the consummation of an initial public offering, or, with respect to any holder of registrable shares, such earlier time after the initial public offering at which such holder can sell all registrable shares held by it pursuant to Rule 144(k) of the Securities Act or holds one percent or less of the outstanding ordinary shares, and all registrable shares held by such holder can be sold in any three-month period without registration in compliance with Rule 144 of the Securities Act.

We and our shareholders intend to amend our shareholders agreement immediately after this offering, but the terms relating to the registration rights described in this prospectus are not expected to be changed in connection with such amendment.

Inspection of Books and Records

Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”

DESCRIPTION OF AMERICAN DEPOSITARY SHARES

The Bank of New York will execute and deliver the American Depositary Receipts representing Ordinary Shares of the Par Value of US$0.01 per share of Ctrip.com International, Ltd. (Incorporated under the Laws of Cayman Islands), also referred to as ADRs. Each ADR is a certificate evidencing a specific number of American Depositary Shares, also referred to as ADSs. Each ADS will represent two ordinary shares (or a right to receive two ordinary shares) deposited with the Hong Kong office of The Hongkong and Shanghai Banking Corporation Limited, as custodian. Each ADR will also represent securities, cash or other property deposited with The Bank of New York but not distributed to ADR holders. The depositary’s corporate trust office at which the ADRs will be administered is located at 101 Barclay Street, New York, New York 10286.

You may hold ADSs either directly (by having an ADR registered in your name) or indirectly through your broker or other financial institution. If you hold ADSs directly, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADR holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

As an ADR holder, we will not treat you as one of our shareholders and you will not have shareholder rights. The depositary will be the holder of the shares underlying your ADSs. As a holder of ADRs, you will have ADR holder rights. A deposit agreement among us, the depositary and you, as an ADR holder, and the beneficial owners of ADRs set out ADR holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADRs.

We are providing you with a summary of the deposit agreement. You should read this summary together with the deposit agreement and the ADR. You can inspect a copy of the deposit agreement at the corporate trust office of the depositary, currently located at 101 Barclay Street, New York, New York 10286, and at the principal offices of the custodian, which will act as agent of depositary, currently located at 1 Queen’s Road, Central, Hong Kong. We urge you to review the deposit agreement in its entirety as well as the form of ADR attached to the deposit agreement.

Dividends and Other Distributions

The Bank of New York has agreed to pay to you the cash dividends or other distributions it or the custodian receives on shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of shares your ADSs represent.


	•	*Cash.* The Bank of New York will convert any cash dividend or other cash distribution we pay on the shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any approval from any government is needed and cannot be obtained without excessively burdensome or otherwise unreasonable efforts, or there are foreign exchange controls in place that prohibit such transfer, the deposit agreement allows The Bank of New York to distribute RMB only to those ADR holders to whom it is possible to do so. It will hold RMB it cannot convert for the account of the ADR holders who have not been paid. It will not invest RMB and it will not be liable for interest.

Before making a distribution, any withholding taxes that must be paid will be deducted. See “Taxation — United States Federal Income Taxation — U.S. Holders — Taxation of Dividends and other Distributions on the Shares of ADSs”. The Bank of New York will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when The Bank of New York cannot convert RMB, you may lose some or all of the value of the distribution.


	•	*Shares.* The Bank of New York may distribute additional ADRs representing any shares we may distribute as a dividend or free distribution, if we furnish it promptly with satisfactory evidence that it is legal to do so. The Bank of New York will only distribute whole ADSs. It will sell shares which would require it to issue a fractional ADS and distribute the net proceeds in


		the same way as it does with cash. If The Bank of New York does not distribute additional ADRs, each ADS will also represent the new shares.

	•	*Rights to Purchase Additional Shares.* If we offer holders of our ordinary shares any rights to subscribe for additional shares or any other rights, The Bank of New York may make these rights available to you. We must first instruct The Bank of New York to do so and furnish it with satisfactory evidence that it is legal to do so. If we do not furnish this evidence and/or give these instructions, and The Bank of New York decides it is practical to sell the rights, The Bank of New York will sell the rights and distribute the proceeds, in the same way as it does with cash. The Bank of New York may allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.

		If The Bank of New York makes rights available to you, it will exercise the rights and purchase the shares on your behalf. The depositary will then deposit the shares and deliver the ADSs to you. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.

		U.S. securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after exercise of rights. Under the deposit agreement, The Bank of New York will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act of 1933, as amended, with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. We can give no assurance that we can establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. In this case, The Bank of New York may issue the ADSs under a separate restricted deposit agreement which will contain the same provisions as the agreement, except for changes needed to put the restrictions in place.

	•	*Other Distributions.* The Bank of New York will send to you anything else we distribute on deposited securities by means it thinks are legal, fair and practical. If it cannot make the distribution in that way, The Bank of New York has a choice. It may decide to sell what we distributed and distribute the net proceeds in the same way as it does with cash or it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property.

The Bank of New York is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADR holders. We have no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADRs, shares, rights or anything else to ADR holders. This means that you may not receive the distribution we make on our shares or any value for them if it is illegal or impractical for us to make them available to you.

Deposit, Withdrawal and Cancellation

The Bank of New York will issue ADRs if you or your broker deposit shares or evidence of rights to receive shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York will register the appropriate number of ADRs in the names you request and will deliver the ADRs at its corporate trust office to the persons you request.

You may turn in your ADRs at The Bank of New York’s office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York will deliver:


	(1) the deliverable portion of the underlying shares to an account designated by you; and

	(2) the deliverable portion of any other deposited securities underlying the ADR at the office of the custodian. Or, at your request, risk and expense, The Bank of New York will deliver the deliverable portion of the deposited securities at its corporate trust office.

Voting Rights

You may instruct The Bank of New York to vote the shares underlying your ADSs but only if we ask The Bank of New York to ask for your instructions. Otherwise, you will not be able to exercise your right to vote unless you withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the shares.

If we ask for your instructions, The Bank of New York will notify you of the upcoming vote and arrange to deliver our voting materials to you. The materials will:


	(1) describe the matters to be voted on; and

	(2) explain how you, on a specified date, may instruct The Bank of New York to vote the shares or other deposited securities underlying your ADSs as you direct. For instructions to be valid, The Bank of New York must receive them on or before the date specified. The Bank of New York will try, in compliance with Hong Kong law and the provisions of our memorandum and articles of association, to vote or to have its agents vote the shares or other deposited securities as you instruct.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct The Bank of New York to vote your shares. In addition, The Bank of New York and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do if your shares are not voted as you requested.

Notices and Reports

Upon receipt of notice of any meeting of holders of ADSs or other deposited securities, if requested in writing by the company, The Bank of New York will, as soon as practicable thereafter, mail to the owners of ADRs a notice which contains (a) such information as is contained in such notice of meeting received by The Bank of New York from the company, (b) a statement that the owners of ADRs as of the close of business on a specified record date will be entitled, subject to any applicable provisions of the Cayman Islands law and of the Memorandum and Articles of Association of the company, to instruct The Bank of New York as to the exercise of the voting rights, if any, pertaining to the amount of shares or other deposited securities represented by their respective ADSs, and (c) a statement as to the manner in which instructions may be given.

The Bank of New York will make available for inspection by registered holders at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the company, which are both (a) received by The Bank of New York as the holder of the deposited securities, and (b) made generally available to the holders of such deposited securities by the company. However, such inspection shall not be for the purpose of communicating with registered holders of ADRs in the interest of a business or object other than the business of our company, or matters relating to the deposit agreement or the ADRs. The Bank of New York will also, upon written request, send to the registered holders copies of such reports when furnished by the company pursuant to the deposit agreement. Any such reports and communications, including any proxy soliciting material, furnished to The Bank of New York by the company will be furnished in English.

Fees and Expenses


*Persons depositing shares or*
ADR holders must pay:		For:
US$5.00 (or less) per 100 ADSs (or portion thereof)		• Each issuance of an ADS, including as a result of a distribution of shares or rights or other property
		• Each cancellation of an ADS, including if the deposit agreement terminates

US$0.02 (or less) per ADS (or portion thereof)		• Any cash payment

A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs		• Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADR holders

US$0.02 (or less) per ADSs per calendar year (if the depositary has not collected any cash distribution fee during that year)		• Depositary services

Registration or transfer fees		• Transfer and registration of shares on the shares register of the registrar of the Foreign Registrar from your name to the name of the depositary or its agent when you deposit or withdraw common shares

Expenses of the depositary		• Conversion of RMB to U.S. dollars
		• Cable, telex, and facsimile transmission expenses as are expressly provided in the deposit agreement

Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS		• As necessary

Any charges incurred by the depositary or its agents for servicing the deposited securities		• As necessary

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your ADRs or on the deposited securities underlying your ADRs. The Bank of New York may refuse to transfer your ADRs or allow you to withdraw the deposited securities underlying your ADRs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited securities underlying your ADRs to pay any taxes owed and you will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the number of ADRs to reflect the sale and pay to you any proceeds, or send to you any property, remaining after it has paid the taxes.

Reclassifications, Recapitalizations and Mergers


*If we:*		Then:
• Change the nominal or par value of our shares • Reclassify, split up or consolidate any of the deposited securities • Distribute securities on the shares that are not distributed to you • Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action		The cash, shares or other securities received by the depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities. The depositary may, and will if we ask it to, distribute some or all of the cash, shares or other securities it received. It may also issue new ADSs or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.

Amendment and Termination

We may agree with The Bank of New York to amend or extend the deposit agreement and the ADRs without your consent for any reason. If the amendment will cause any of the following results, the amendment will become effective 30 days after The Bank of New York notifies you of the amendment:


	•	adds or increases fees or charges, except for:


	—	taxes and other governmental charges;

	—	registration fees;

	—	cable, telex or facsimile transmission costs;

	—	delivery costs or other such expenses; or


	•	prejudices any important right of ADR holders.

At the time an amendment becomes effective, you are considered, by continuing to hold your ADR, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended. An amendment to the deposit agreement may include extending such agreement.

The Bank of New York will terminate the deposit agreement if we ask it to do so. In such case, The Bank of New York must notify you at least 90 days before termination. The Bank of New York may also terminate the deposit agreement if The Bank of New York has told us that it would like to resign and we have not appointed a new depositary bank within 90 days.

After termination, The Bank of New York and its agents will be required to do only the following under the deposit agreement:


	•	collect distributions on the deposited securities;

	•	sell rights and other property; and

	•	deliver shares and other deposited securities upon cancellation of ADRs.

One year after termination, The Bank of New York may sell any remaining deposited securities by public or private sale. After that, The Bank of New York will hold the proceeds of the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADR holders that have not surrendered their ADRs. It will not invest the money and will have no liability for interest. The Bank of New York’s only obligations will be an indemnification obligation and an obligation to account for the proceeds of the sale and other cash. After termination, our only obligations will be an indemnification obligation and our obligation to pay specified amounts to The Bank of New York.

Limitations On Obligations and Liability to ADR Holders

The deposit agreement expressly limits our obligations and the obligations of The Bank of New York, and it limits our liability and the liability of The Bank of New York. We and The Bank of New York:


	•	are only obligated to take the actions specifically provided for in the deposit agreement without negligence or bad faith;

	•	are not liable if either is prevented or delayed by law or circumstances beyond their control from performing our obligations under the deposit agreement;

	•	are not liable if either exercises discretion permitted under the deposit agreement;

	•	have no obligation to become involved in a lawsuit or other proceeding related to the ADRs or the deposit agreement on your behalf of any other party; and

	•	may rely upon any documents they believe in good faith to be genuine and to have been signed or presented by the proper party.

In the deposit agreement, we and The Bank of New York agree to indemnify each other under designated circumstances.

Requirements for Depositary Actions

The ADRs are transferable on the books of The Bank of New York, provided that The Bank of New York may close the transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. Before The Bank of New York will issue or register transfer of an ADR, make a distribution on an ADR, or process a withdrawal of shares, The Bank of New York may require:


	•	payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;

	•	production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

	•	compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

The Bank of New York may refuse to deliver, transfer or register transfers of ADRs generally when our books or the books of The Bank of New York are closed, or at any time if The Bank of New York or we think it advisable to do so.

You have the right to cancel your ADRs and withdraw the underlying shares at any time except:


	•	when temporary delays arise because: (1) The Bank of New York or we have closed its or our transfer books; (2) the transfer of shares is blocked to permit voting at a shareholders’ meeting; or (3) we are paying a dividend on the shares;

	•	when you or other ADR holders seeking to withdraw shares owe money to pay fees, taxes and similar charges; or

	•	when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADRs or to the withdrawal of shares or other deposited securities.

The right of withdrawal may not be limited by any other provision of the deposit agreement.

Pre-Release of ADRs

In compliance with the provisions of the deposit agreement, The Bank of New York may issue ADRs before deposit of the underlying shares. This is called a pre-release of the ADR. The Bank of New York may also deliver shares upon cancellation of pre-released ADRs, even if the ADRs are cancelled before the pre-

release transaction has been closed out. A pre-release is closed out as soon as the underlying shares are delivered to The Bank of New York. The Bank of New York may receive ADRs instead of shares to close out a pre-release. The Bank of New York may pre-release ADRs only under the following conditions:


	•	before or at the time of the pre-release, the person to whom the pre-release is being made must represent to The Bank of New York in writing that it or its customer owns the shares or ADRs to be deposited;

	•	the pre-release must be fully collateralized with cash or other collateral that The Bank of New York considers appropriate; and

	•	The Bank of New York must be able to close out the pre-release on not more than five business days’ notice.

In addition, The Bank of New York will limit the number of ADRs that may be outstanding at any time as a result of pre-release to 30.0% of total shares deposited, although The Bank of New York may disregard the limit from time to time, if it thinks it is appropriate to do so.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have outstanding 4,200,000 ADSs representing approximately 28.0% of our ordinary shares. All of the ADSs sold in this offering will be freely transferable by persons other than our “affiliates” without restriction or further registration under the Securities Act. Sales of substantial amounts of our ADSs in the public market could adversely affect prevailing market prices of our ADSs. Prior to this offering, there has been no public market for our ordinary shares or the ADSs, and while we have applied for the ADSs to be quoted on the Nasdaq National Market, we cannot assure you that a regular trading market will develop in the ADSs. We do not expect that a trading market will develop for our ordinary shares not represented by the ADSs.

Lock-Up Agreements

Our directors, executive officers and shareholders have signed lock-up agreements under which they have agreed, subject to some exceptions, not to transfer or dispose of, directly or indirectly, any of our ordinary shares, in the form of ADSs or otherwise, or any securities convertible into or exchangeable or exercisable for shares of our ordinary shares, in the form of ADSs or otherwise, for a period of 180 days in the case of all these persons, excluding the holders of our Series C preferred shares, and for one year in the case of the holders of our Series C preferred shares, after the date this registration statement becomes effective. After the expiration of the 180-day period, the ordinary shares or ADSs held by our directors, executive officers or shareholders may be sold subject to the restrictions under Rule 144 under the Securities Act or by means of registered public offerings.

Rule 144

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who has beneficially owned our ordinary shares for at least one year, is entitled to sell within any three-month period a number of ordinary shares that does not exceed the greater of the following:



	•	1.0% of the then outstanding ordinary shares, in the form of ADSs or otherwise, which will equal approximately 300,309 ordinary shares immediately after this offering; or


	•	the average weekly trading volume of our ordinary shares in the form of ADSs or otherwise, during the four calendar weeks preceding the date on which notice of the sale is filed with the Securities and Exchange Commission.

Sales under Rule 144 must be through unsolicited brokers’ transactions. They are also subject to manner of sale provisions, notice requirements and the availability of current public information about us.

Rule 144(k)

Under Rule 144(k), a person who is not our affiliate at any time during the three months preceding a sale, and who has beneficially owned the ordinary shares, in the form of ADSs or otherwise, proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate, is entitled to sell those shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Therefore, unless otherwise restricted, “144(k) shares” may be sold at any time.

Rule 701

In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases ordinary shares, in the form of ADSs or otherwise, from us in connection with a compensatory stock plan or other written agreement is eligible to resell such shares in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144.

Registration Rights

Upon completion of this offering, certain holders of our ordinary shares or their transferees will be entitled to request that we register their ordinary shares under the Securities Act, following the expiration of the lockup agreements described above. See “Description of Share Capital — Registration Rights.”

TAXATION

The following summary of the material Cayman Islands and United States federal income tax consequences of an investment in our ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under state, local and other tax laws. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Maples and Calder Asia, special Cayman Islands counsel to us. To the extent the discussion relates to matters of United States law or legal conclusions and subject to the qualification herein, it represents the opinion of Latham & Watkins LLP, our special U.S. counsel.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

United States Federal Income Taxation

The following discussion describes the material United States federal income tax consequences under present law of an investment in the ADSs or ordinary shares. This summary applies only to investors that hold the ADSs or ordinary shares as capital assets and that have the U.S. dollar as their functional currency. This discussion is based on the tax laws of the United States as in effect on the date of this prospectus and on United States Treasury regulations in effect or, in some cases, proposed, as of the date of this prospectus, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

The following discussion does not deal with the tax consequences to any particular investor or to persons in special tax situations such as:


	•	banks;

	•	financial institutions;

	•	insurance companies;

	•	broker dealers;

	•	traders that elect to mark to market;

	•	tax-exempt entities;

	•	persons liable for alternative minimum tax;

	•	persons holding an ADS or ordinary share as part of a straddle, hedging, conversion or integrated transaction;

	•	holders that actually or constructively own 10% or more of our voting stock; or

	•	persons holding ADSs or ordinary shares through partnerships or other pass-through entities.

Prospective purchasers are urged to consult their tax advisors about the application of the United States Federal tax rules to their particular circumstances as well as the state and local and foreign tax consequences to them of the purchase, ownership and disposition of ADSs or ordinary shares.

The discussion below of the United States federal income tax consequences to “U.S. Holders” will apply if you are the beneficial owner of ADSs or ordinary shares and you are


	•	a citizen or resident of the United States;

	•	a corporation or partnership organized under the laws of the United States, any State or the District of Columbia;

	•	an estate whose income is subject to United States federal income taxation regardless of its source;

	•	a trust that (1) is subject to the supervision of a court within the United States and the control of one or more United States persons or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

If you are not described as a U.S. Holder, you will be considered a “Non-U.S. Holder.” Non-U.S. Holders should consult the discussion below regarding the United States federal income tax consequences applicable to Non-U.S. Holders.

The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with the terms. If you hold ADSs, you should be treated as the holder of the underlying ordinary shares represented by those ADSs for United States federal income tax purposes.

U.S. Holders

Taxation of Dividends and Other Distributions on the ADSs or Ordinary Shares

Subject to the passive foreign investment company rules discussed below, the gross amount of dividends paid with respect to the ADSs or ordinary shares, generally will be included in your gross income as ordinary income on the date of receipt by the depositary, in the case of ADSs, or by you, in the case of ordinary shares, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits. For this purpose, earnings and profits will be computed under United States federal income tax principles. The dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations. To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits, it will be treated first as a tax-free return of your tax basis in your ADSs or ordinary shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain.

Dividends paid in RMB will be included in your income as a U.S. dollar amount based on the exchange rate in effect on the date of receipt by the depositary, in the case of ADSs, or by you, in the case of ordinary shares, regardless of whether the payment is in fact converted into U.S. dollars at that time. If you do not receive U.S. dollars on the date the dividend is distributed, you will be required to include either gain or loss in income when you later exchange the RMB for U.S. dollars. The gain or loss will be equal to the difference between the U.S. dollar value of the amount that you include in income upon receipt of the dividend and the amount that you receive when you actually exchange the RMB for U.S. dollars. The gain or loss generally will be ordinary income or loss from United States sources. If we distribute to you non-cash property, you will include in income an amount equal to the U.S. dollar equivalent of the fair market value of the property on the date that it is distributed.

Under recently enacted legislation, with respect to non-corporate taxpayers for taxable years beginning after December 1, 2002 and before January 1, 2009 such dividends may be taxed at the lower applicable capital gains rate provided that (1) the ADSs or ordinary shares are readily tradable on an established securities market in the United States, (2) we are not a passive foreign investment company (as

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discussed below) or a foreign personal holding company (as discussed below) for either our taxable year in which the dividend was paid or the preceding taxable year, and (3) certain holding period requirements are met. You should consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our ADSs or ordinary shares.

Dividends will constitute foreign source income for foreign tax credit limitation purposes. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to the ADSs or ordinary shares will be “passive income” or, in the case of certain U.S. Holders, “financial services income.”

Taxation of Disposition of Shares

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of an ADS or ordinary share equal to the difference between the amount realized (in U.S. dollars) for the ADS or ordinary share and your tax basis (in U.S. dollars) in the ADS or ordinary share. If the consideration you receive for the ADS or ordinary share is not paid in U.S. dollars, the amount realized will be the U.S. dollar value of the payment received. In general, the U.S. dollar value of such a payment will be determined on the date of receipt of payment if you are a cash basis taxpayer and on the date of disposition if you are an accrual basis taxpayer. However, if the ADSs or ordinary shares are treated as traded on an established securities market and you are either a cash basis taxpayer or an accrual basis taxpayer who has made a special election, you will determine the U.S. dollar value of the amount realized in a foreign currency by translating the amount received at the spot rate of exchange on the settlement date of the sale. The gain or loss generally will be capital gain or loss. If you are an individual who has held the ADS or ordinary share for more than one year, you will be eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitation. Any such gain or loss that you recognize will generally be treated as United States source income or loss.

Passive Foreign Investment Company

We believe that we are not a passive foreign investment company for United Sates federal income tax purposes and do not expect to become a passive foreign investment company in the future. A non-U.S. corporation is considered a passive foreign investment company for any taxable year if either


	•	at least 75% of its gross income is passive income, or

	•	at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income.

We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, more than 25% (by value) of the stock.

We must make a separate determination each year as to whether we are a passive foreign investment company. As a result, our passive foreign investment company status may change. In particular, fluctuation in the market price of our ADSs or ordinary shares may result in us becoming a passive foreign investment company.

If we are a passive foreign investment company for any taxable year during which you hold ADSs or ordinary shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the ADSs or ordinary shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of

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the three preceding taxable years or your holding period for the ADSs or ordinary shares will be treated as an excess distribution. Under these special tax rules


	•	the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares,

	•	the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a passive foreign investment company, will be treated as ordinary income, and

	•	the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ADSs or ordinary shares cannot be treated as capital, even if you hold the ADSs or ordinary shares as capital assets.

If we are a passive foreign investment company, you may avoid taxation under the rules described above by making a “qualified electing fund” election to include your share of our income on a current basis, or a “deemed sale” election once we no longer qualify as a passive foreign investment company. However, you may make a qualified electing fund election only if we agree to furnish you annually with certain tax information, and we do not presently intend to prepare or provide such information.

Alternatively, a U.S. Holder of “marketable stock” in a passive foreign investment company may make a mark-to-market election for stock of a passive foreign investment company to elect out of the tax treatment discussed three paragraphs above. If you make a mark-to-market election for the ADSs or ordinary shares, you will include in income each year an amount equal to the excess, if any, of the fair market value of the ADSs or ordinary shares as of the close of your taxable year over your adjusted basis in such ADSs or ordinary shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the ADSs or ordinary shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the ADSs or ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ADSs or ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the ADSs or ordinary shares, as well as to any loss realized on the actual sale or disposition of the ADSs or ordinary shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ADSs or ordinary shares. Your basis in the ADSs or ordinary shares will be adjusted to reflect any such income or loss amounts. The tax rules that apply to distributions by corporations which are not passive foreign investment companies would apply to distributions by us.

The mark-to-market election is available only for stock which is regularly traded on a qualified exchange or other market, as defined in applicable Treasury regulations. We expect that the ADSs and the ordinary shares will be listed on Nasdaq National Market and, consequently, the mark-to-market election would be available to you were we to be or become a passive foreign investment company.

If you hold ADSs or ordinary shares in any year in which we are a passive foreign investment company, you would be required to file Internal Revenue Service Form 8621 regarding distributions received on the ADSs or ordinary shares and any gain realized on the disposition of the ADSs or ordinary shares.

Foreign Personal Holding Company

Depending on the degree of direct or indirect ownership of our shares (including shares represented by ADSs) by individuals who are U.S. citizens or residents (directly, indirectly or by attribution), we may constitute a foreign personal holding company. In general, a foreign corporation will constitute a foreign personal holding company for United States federal income tax purposes if more than 50% of the equity of the

102

corporation, measured by reference to voting power or value of the corporation, is owned directly, indirectly or by attribution by five or fewer individuals who are U.S. citizens or residents and at least 60% (50% in taxable years after the corporation qualifies as a foreign personal holding company) of the foreign corporation’s income is passive income. We believe that we are not a foreign personal holding company and do not expect to become a foreign personal holding company in the future. If we were treated as a foreign personal holding company, all U.S. Holders of our shares or ADSs would be treated as receiving a dividend at the end of our taxable year in an amount equal to each such holder’s pro rata share of our “undistributed foreign personal holding company income” (very generally, all of our taxable income less a dividend paid deduction).

Non-U.S. Holders

If you are a Non-U.S. Holder, you generally will not be subject to United States federal income tax on dividends paid by us unless the income is effectively connected with your conduct of a trade or business in the United States.

You generally will not be subject to United States federal income tax on any gain attributable to a sale or other disposition of the ADSs or ordinary shares unless such gain is effectively connected with your conduct of a trade or business within the United States or you are a natural person who is present in the United States for 183 days or more and certain other conditions exist.

Dividends and gains that are effectively connected with your conduct of a trade or business in the United States generally will be subject to tax in the same manner as they would be if you were a U.S. Holder. Effectively connected dividends and gains received by a corporate Non-U.S. Holder may also be subject to an additional branch profits tax at a 30% rate or a lower tax treaty rate.

Information Reporting and Backup Withholding

In general, information reporting for U.S. Federal income tax purposes will apply to distributions made on the ADSs or ordinary shares paid within the United States to a non-corporate United States person and on sales of the ADSs or ordinary shares to or through a United States office of a broker by a non-corporate United States person. Payments made outside the United States will be subject to information reporting in limited circumstances.

In addition, backup withholding of U.S. Federal income tax will apply to distributions made on ADSs or ordinary shares within the United States to a non-corporate United States person and on sales of ADSs or ordinary shares to or through a United States office of a broker by a non-corporate United States person who:


	•	fails to provide an accurate taxpayer identification number,

	•	is notified by the Internal Revenue Service that backup withholding will be required, or

	•	fails to comply with applicable certification requirements.

The amount of any backup withholding collected will be allowed as a credit against United States federal income tax liability provided that appropriate returns are filed.

A Non-U.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status to the payer, under penalties of perjury, on IRS Form W-8BEN.

103

UNDERWRITING

We, together with the selling shareholders, intend to offer the ADSs in the United States and Canada through the U.S. underwriters and elsewhere through the international managers. Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower, World Financial Center, New York, New York 10281-1201, is acting as representative of the U.S. underwriters named below. Subject to the terms and conditions contained in the U.S. underwriting agreement among us, the selling shareholders and the U.S. underwriters, and concurrently with the sale of 2,100,000 ADSs to the international managers, we and the selling shareholders have agreed to sell to the U.S. underwriters, and the U.S. underwriters severally have agreed to purchase from us and the selling shareholders, the number of ADSs listed opposite their names below.


		Number
U.S. Underwriter		of ADSs

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

U.S. Bancorp Piper Jaffray Inc.

SoundView Technology Corporation

Total

We and the selling shareholders have also entered into an international purchase agreement with the international managers for sale of the ADSs outside the United States and Canada for whom Merrill Lynch Far East Limited, 18/F Asia Pacific Finance Tower, 3 Garden Road, Central, Hong Kong, is acting as the lead manager. Subject to the terms and conditions contained in the international purchase agreement, and concurrently with the sale of 2,100,000 ADSs to the U.S. underwriters, we and the selling shareholders have agreed to sell to the international managers, and the international managers severally have agreed to purchase from us and the selling shareholders, the number of ADSs listed opposite their names below.


		Number
International Manager		of ADSs

Merrill Lynch Far East Limited

CLSA Limited

BOCI Asia Limited

Total

The public offering price per ADS and the total underwriting discount per ADS are identical under the U.S. underwriting agreement and the international purchase agreement. Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as the global coordinator and bookrunner for the offering.

The U.S. underwriters and the international managers, collectively referred to as the underwriters in the section, have agreed to purchase all of the ADSs sold under the U.S. underwriting agreement and the international purchase agreement if any of these ADSs are purchased. If an underwriter defaults, the U.S. underwriting agreement and international purchase agreement provide that, in certain circumstances, the purchase commitments of the nondefaulting underwriters may be increased or the U.S. underwriting agreement and the international purchase agreement may be terminated. The closings for the sale of the ADSs to be purchased by the U.S. underwriters and the international managers are conditioned on one another.

We and the selling shareholders have agreed to indemnify the U.S. underwriters and the international managers against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the U.S. underwriters and the international managers may be required to make in respect of those liabilities.

The underwriters are offering the ADSs, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the ADSs, and other conditions contained in the U.S. underwriting agreement and international purchase agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

104

Commissions and Discounts

The U.S. underwriters have advised us and the selling shareholders that the U.S. underwriters propose initially to offer the ADSs to the public at the public offering price on the cover page of this prospectus, and to certain dealers at that price less a concession not in excess of US$ per ADS. The U.S. underwriters may allow, and the dealers may reallow, a concession not in excess of US$ per ADS to other dealers. After the initial public offering, the public offering price, concession and discount may be changed.

Overallotment Options

The selling shareholders have granted to the U.S. underwriters and the international managers an option, exercisable for 30 days from the date of this prospectus, to purchase up to 250,000 and 250,000, respectively, additional ADSs at the public offering price less the underwriting discount. The U.S. underwriters and the international managers may exercise such option to purchase solely for the purpose of covering overallotments, if any, incurred in the sale of the ADSs offered hereby. If the U.S. underwriters exercise such option, each will become obligated, subject to conditions contained in the U.S. underwriting agreement or international purchase agreement, to purchase a number of additional ADSs proportionate to that U.S. underwriter’s initial amount reflected in the above table.

The following table shows the per ADS initial public offering price, underwriting discount and the proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the overallotment option.

Per ADS

Without Option

With Option

Public offering price

US$

Underwriting discount

US$

Proceeds, before expenses, to us and the selling shareholders

US$

Intersyndicate Agreement

The U.S. underwriters and the international managers have entered into an intersyndicate agreement that provides for the coordination of their activities. Under the intersyndicate agreement, the U.S. underwriters and the international managers may sell the ADSs to each other for purposes of resale at the initial public offering price, less an amount not greater than the selling concession. Under the intersyndicate agreement, the U.S. underwriters and any dealer to whom they sell the ADSs will not offer to sell or sell the ADSs to non-U.S. or non Canadian persons or to persons they believe intend to resell to non-U.S. or non-Canadian persons, except in the case of transactions under the intersyndicate agreement. Similarly, the international managers and any dealer to whom they sell the ADSs will not offer to sell or sell the ADSs to U.S. persons or Canadian persons or to persons they believe intend to resell to U.S. or Canadian persons, except in the case of transactions under the intersyndicate agreement.

No Sale of Similar Securities

We and our executive officers, directors and shareholders have agreed, with exceptions, not to sell or transfer any of our ordinary shares or ADSs for 180 days in the case of all of these persons, excluding the holders of our Series C preferred shares, and for one year in the case of the holders of our Series C preferred shares, after the date of this prospectus without first obtaining the written consent of the global coordinator and bookrunner. Specifically, we and these other individuals have agreed not to directly or indirectly:


	•	offer, pledge, sell or contract to sell any ordinary shares and ADSs,

	•	sell any option or contract to purchase any ordinary shares and ADSs,

	•	purchase any option or contract to sell any ordinary shares and ADSs,

	•	grant any option, right or warrant for the sale of any ordinary shares and ADSs,

105


	•	lend or otherwise dispose of or transfer any ordinary shares and ADSs, or

	•	enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any ordinary shares and ADS whether any such swap or transaction is to be settled by delivery of shares, ADS or other securities, in cash or otherwise.

This lock-up provision applies to the ordinary shares, ADSs and to securities convertible into or exchangeable or exercisable for or repayable with the ordinary shares or ADSs. It also applies to the ordinary shares and ADSs owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.

Quotation on the Nasdaq National Market

We expect the ADSs to be approved for quotation on the Nasdaq National Market, subject to notice of issuance, under the symbol “CTRP.”

Before this offering, there has been no public market for our ordinary shares or ADSs. The public offering price will be determined through negotiations among us and the global coordinator and bookrunner. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:


	•	the valuation multiples of publicly traded companies that the global coordinator and bookrunner believes to be comparable to us,

	•	our financial information,

	•	the history of, and the prospects for, our company and the industry in which we compete,

	•	an assessment of our management, our past and present operations, and the prospects for, and timing of, our future revenues,

	•	the present state of our development, and

	•	the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the ADSs may not develop. It is also possible that after the offering the ADSs will not trade in the public market at or above the public offering price.

The underwriters do not expect to sell more than 5.0% of the ADSs in the aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of the ADSs is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our ADSs. However, the U.S. representative may engage in transactions that stabilize the price of the ADSs, such as bids or purchases to peg, fix or maintain that price.

If the underwriters create a short position in the ADSs in connection with the offering, i.e., if they sell more shares than are listed on the cover of this prospectus, the U.S. representative may reduce that short position by purchasing the ADSs in the open market. The U.S. representative may also elect to reduce any short position by exercising all or part of the overallotment option described above. The underwriters may sell more ADSs than could be covered by exercising all of the overallotment option, in which case, they would have to cover these sales through open market purchases. Purchases of the ADSs to stabilize its price or to reduce a short position may cause the price of the ADSs to be higher than it might be in the absence of such purchases.

The U.S. representative may also impose a penalty bid on underwriters and selling group members. This means that if the U.S. representative purchase ADSs in the open market to reduce the underwriter’s short position or to stabilize the price of such ADSs, they may reclaim the amount of the selling concession

106

from the underwriters and selling group members who sold those ADSs. The imposition of a penalty bid may also affect the price of the shares in that it discourages resales of those ADSs.

Neither we nor the selling shareholders nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the ADSs. In addition, neither we nor the selling shareholders nor any of the underwriters makes any representation that the U.S. representative or the lead manager will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us. They have received customary fees and commissions for these transactions.

Selling Restrictions

This prospectus does not constitute an offer of, or an invitation by or on behalf of, us or by or on behalf of the underwriters, to subscribe for or purchase, any of the ADSs in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in that jurisdiction. The distribution of this prospectus and the offering of the ADSs in certain jurisdictions may be restricted by law. We and the underwriters require persons into whose possession this prospectus comes to inform themselves about and to observe any such restrictions.

We will not offer or sell any ordinary shares or ADSs to any member of the public in the Cayman Islands.

Electronic Distributions

A prospectus in electronic format may be made available on Web sites maintained by one or more of the underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters that will make Internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these Web sites is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or any underwriter in its capacity as underwriter, and should not be relied upon by investors.

In addition, a prospectus in electronic format is being made available on an Internet website maintained by E*TRADE Securities, Inc. SoundView Technology Corporation, pursuant to a Relationship Agreement with E*TRADE, may offer shares that it underwrites to customers of E*TRADE. The underwriters may allocate a number of shares to SoundView Technology Corporation for sale to online brokerage account holders of E*TRADE Securities, Inc. These online brokerage account holders will have the opportunity to purchase shares using the Internet in accordance with procedures established by E*TRADE Securities, Inc.

Settlement Cycle

We expect that delivery of the ADSs will be made against payment therefor on or about the date specified in the last paragraph of the cover page of this prospectus, which is the business day in New York following the date of this prospectus. Pursuant to Rule 15c6-1 under the Securities Exchange Act trades in the secondary market generally are required to settle in three business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the ADSs on the date of this prospectus or the next four succeeding business days will be required, by virtue of the fact that these securities will settle in T+3, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement and should consult their own advisors.

107

LEGAL MATTERS

The validity of the ADSs and certain other legal matters with respect to U.S. federal and New York laws in connection with this offering will be passed upon for us by Latham & Watkins LLP. Certain legal matters with respect to U.S. federal and New York laws in connection with this offering will be passed upon for the underwriters by Simpson Thacher & Bartlett LLP. The validity of the ordinary shares represented by the ADSs offered in this offering will be passed upon for us by Maples and Calder Asia. Legal matters as to Chinese law will be passed upon for us by Commerce & Finance Law Offices and for the underwriters by Jingtian & Gongcheng. Legal matters as to Hong Kong law will be passed upon for us by Boughton Peterson Yang Anderson. Latham & Watkins LLP may rely upon Maples and Calder Asia with respect to matters governed by Cayman Islands’ law, Commerce & Finance Law Office with respect to matters governed by Chinese law, and upon Boughton Peterson Yang Anderson with respect to matters governed by Hong Kong law. Simpson Thacher & Bartlett LLP may rely upon Maples and Calder Asia with respect to matters governed by Cayman Islands’ law and Jingtian & Gongcheng with respect to matters governed by Chinese law.

EXPERTS

Our consolidated financial statements as of and for the years ended December 31, 2001 and 2002, and as of and for the nine months ended September 30, 2003, included in this prospectus have been audited by PricewaterhouseCoopers, independent public accountants, as stated in their reports appearing elsewhere in this prospectus, and are included in reliance upon the reports of PricewaterhouseCoopers given on their authority as experts in auditing and accounting.

The offices of PricewaterhouseCoopers are located at 19th Floor, Shui On Plaza, 333 Huai Hai Zhong Road, Shanghai, 200021, China.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration statement on Form F-1, including relevant exhibits and schedules under the Securities Act with respect to the ADSs and underlying ordinary shares, to be sold in this offering. This prospectus, which constitutes a part of the registration statement, does not contain all of the information contained in the registration statement. You should read the registration statement and its exhibits and schedules for further information with respect to us and our ADSs.

Immediately upon completion of this offering, we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. All information filed with the SEC can be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Additional information may also be obtained over the Internet at the SEC’s website at www.sec.gov. Our SEC filings, including this registration statement, and other information may also be inspected at the offices of the Nasdaq National Market, Reports Section, 1735 K Street, N.W. Washington, D.C. 20006.

We will furnish the depositary referred to under “Description of American Depositary Shares” with annual reports, which will include annual audited consolidated financial statements prepared in accordance with U.S. GAAP. The depositary has agreed that, at our request, it will promptly mail these reports to all registered holders of ADSs. We will also furnish to the depositary all notices of shareholders’ meetings and other reports and communications that are made generally available to our shareholders. The depositary will arrange for the mailing of these documents to record holders of ADSs. Please see “Description of American Depositary Shares” for further details on the responsibilities of the depositary.

108

CTRIP.COM INTERNATIONAL, LTD.

INDEX TO FINANCIAL STATEMENTS


	Page

Year-End Financial Statements
Report of Independent Auditors		F-2
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2000 (unaudited), 2001 and 2002		F-3
Consolidated Balance Sheets as of December 31, 2000 (unaudited), 2001 and 2002		F-4
Consolidated Statements of Changes of Shareholders’ Equity (Deficit) for the Years Ended December 31, 2000 (unaudited), 2001 and 2002		F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2000 (unaudited), 2001 and 2002		F-7
Notes to the Consolidated Financial Statements for the Years Ended December 31, 2000 (unaudited), 2001 and 2002		F-8
Interim Financial Statements
Report of Independent Auditors		F-32
Consolidated Statements of Operations and Comprehensive Income for the Nine-Month Periods Ended September 30, 2002 (unaudited) and 2003		F-33
Consolidated Balance Sheets as of September 30, 2002 (unaudited) and 2003		F-34
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Nine-Month Periods Ended September 30, 2002 (unaudited) and 2003		F-35
Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2002 (unaudited) and 2003		F-36
Notes to the Consolidated Financial Statememts for the Nine-Month Periods Ended September 30, 2002 (unaudited) and 2003		F-37

F-1

REPORT OF INDEPENDENT AUDITORS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

CTRIP.COM INTERNATIONAL, LTD.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations and comprehensive income (loss), of changes in shareholders’ equity (deficit) and of cash flows expressed in Renminbi present fairly, in all material respects, the financial position of Ctrip.com International, Ltd. as of December 31, 2001 and 2002, and the results of its operations and its cash flows for the years ended December 31, 2001 and 2002, in conformity with generally accepted accounting principles in the United States of America. These financial statements are the responsibility of Ctrip.com International, Ltd.’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards in the United States of America, which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 8 to the consolidated financial statements, Ctrip.com International, Ltd. changed its method of accounting for goodwill in the year ended December 31, 2002, to conform to Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

/s/ PricewaterhouseCoopers

Shanghai, People’s Republic of China

September 19, 2003

F-2

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002


				2000
		Note		(unaudited)			2001			2002			2002

				RMB			RMB			RMB			US$
													(Note
													2d)
Revenues:
	Hotel reservation				5,338,990			43,379,536			96,762,837			11,690,427
	Air-ticketing				845,776			1,831,855			5,600,241			676,595
	Packaged tour				310,750			594,802			432,295			52,228
	Others				412,940			576,075			2,517,316			304,130

Total revenues					6,908,456			46,382,268			105,312,689			12,723,380

Less: business tax and related surcharges					(455,554	)		(2,398,690	)		(5,264,035	)		(635,976	)

Net revenues					6,452,902			43,983,578			100,048,654			12,087,404

Costs of services					(1,949,479	)		(7,939,835	)		(13,673,013	)		(1,651,909	)

Gross profit					4,503,423			36,043,743			86,375,641			10,435,495

Operating expenses:
	Product development				(6,817,324	)		(7,759,081	)		(13,364,920	)		(1,614,686	)
	Sales and marketing				(17,378,333	)		(30,359,491	)		(32,308,004	)		(3,903,300	)
	General and administrative				(11,677,103	)		(14,814,417	)		(15,702,137	)		(1,897,058	)
	Share-based compensation*		13		—			(21,950	)		(462,140	)		(55,834	)
	Amortization of goodwill and other intangible assets				(370,822	)		(1,806,611	)		(353,241	)		(42,677	)
	Other expenses incurred for joint venture companies		6		—			(934,572	)		(915,056	)		(110,553	)

Total operating expenses					(36,243,582	)		(55,696,122	)		(63,105,498	)		(7,624,108	)

Income (loss) from operations					(31,740,159	)		(19,652,379	)		23,270,143			2,811,387

Interest income					735,178			2,190,983			319,230			38,568
Interest expense					—			(62,058	)		(41,261	)		(4,985	)
Other income (expense)					(60,328	)		(79,858	)		1,014,872			122,613

Income (loss) before income tax benefit (expense), minority interests and share of loss of joint venture companies					(31,065,309	)		(17,603,312	)		24,562,984			2,967,583

Income tax benefit (expense)			10		7,087,874			2,341,899			(10,042,624	)		(1,213,302	)
Minority interests					—			—			70,997			8,578
Share of loss of joint venture companies			6		—			—			(397,824	)		(48,064	)

Net income (loss) for the year					(23,977,435	)		(15,261,413	)		14,193,533			1,714,795

Accretion for Series B Redeemable Convertible Preferred Shares					(2,195,177	)		(14,316,112	)		(16,492,526	)		(1,992,549	)

Dividends to holders of Series A and Series B Preferred Shares					—			—			(16,762,322	)		(2,025,144	)

Net loss attributable to ordinary shareholders					(26,172,612	)		(29,577,525	)		(19,061,315	)		(2,302,898	)

Other comprehensive income:
	Translation adjustments				22,851			39,433			38,904			4,700

Comprehensive income (loss)					(23,954,584	)		(15,221,980	)		14,232,437			1,719,495

Loss per share
— Basic and diluted			17		(3.03	)		(3.26	)		(2.00	)		(0.24	)

Weighted average ordinary shares outstanding
— Basic and diluted					8,640,000			9,080,349			9,520,698			9,520,698

* Share-based compensation was related to the associated operating expense categories as follows:
	Product development				—			(4,662	)		(131,163	)		(15,847	)
	Sales and marketing				—			(1,399	)		(27,109	)		(3,275	)
	General and administrative				—			(15,889	)		(303,868	)		(36,712	)

					—			(21,950	)		(462,140	)		(55,834	)

The accompanying notes are an integral part of these consolidated financial statements.

F-3

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2000, 2001 AND 2002


				2000
		Note		(unaudited)			2001			2002			2002

				RMB			RMB			RMB			US$
													(Note 2d)
ASSETS
Current assets:
	Cash				88,907,851			42,463,537			38,931,118			4,703,473
	Restricted short-term investment		4		—			24,829,800			—			—
	Accounts receivable				1,705,447			7,369,159			13,969,400			1,687,717
	Due from related parties		15		—			—			2,610,807			315,425
	Prepayments and other current assets		5		1,601,089			3,896,008			3,406,593			411,568
	Deferred tax assets, current		10		36,222			9,837,979			593,143			71,661

Total current assets					92,250,609			88,396,483			59,511,061			7,189,844

Investments in joint venture companies			6		—			—			5,102,176			616,421
Long-term loans to related parties			15		2,000,000			2,000,000			2,100,000			253,712
Long-term deposits					829,109			701,527			1,332,456			160,981
Property, equipment and software			7		5,288,388			9,571,311			18,707,187			2,260,114
Goodwill			8		7,702,552			6,915,849			9,515,849			1,149,660
Other intangible assets			8		2,359,281			1,339,373			986,132			119,140
Deferred tax assets, non-current			10		7,459,858			—			—			—

Total assets					117,889,797			108,924,543			97,254,861			11,749,872

LIABILITIES
Current liabilities:
	Short-term bank loan		9		—			4,000,000			—			—
	Accounts payable				1,797,037			589,304			1,001,359			120,979
	Due to related parties		15		212,017			1,807,567			1,250,862			151,123
	Salary and welfare payable				2,214,082			2,779,213			2,381,713			287,748
	Taxes payable				147,167			706,147			1,937,586			234,090
	Advances from customers				235,746			258,394			1,891,494			228,521
	Provisions for customer reward program		2L		109,762			911,526			2,297,403			277,561
	Deferred acquisition costs		3		3,008,749			—			—			—
	Other payables and accruals		16		2,011,168			1,909,604			2,333,114			281,876

Total current liabilities					9,735,728			12,961,755			13,093,531			1,581,898

Minority interests					—			—			827,961			100,030
Series B Redeemable Convertible Preferred Shares (US$0.01 par value; 7,193,464 shares authorized, issued and outstanding as of December 31, 2000, 2001 and 2002, respectively; redeemable in October 2005 at US$3.1334 per share)			12		94,153,866			108,469,978			124,962,504			15,097,378
Commitments and contingencies			18		—			—			—			—
Shareholders’ equity (deficit)
	Share capital (US$0.01 par value; 40,000,000 shares authorized, 8,640,000 shares issued and outstanding as of December 31, 2000, and 9,520,698 issued and outstanding as of December 31, 2001 and 2002, respectively)				715,392			788,314			788,314			95,240
	Series A Convertible Preferred Shares (US$0.01 par value; 4,320,000 shares authorized, issued and outstanding as of December 31, 2000, 2001 and 2002, respectively)		11		357,696			357,696			357,696			43,215
	Additional paid-in capital				37,883,425			26,621,353			—			—
	Deferred share-based compensation		13		—			(96,263	)		(1,077,460	)		(130,174	)
	Cumulative translation adjustments				22,851			62,284			101,188			12,226
	Accumulated deficit				(24,979,161	)		(40,240,574	)		(41,798,873	)		(5,049,941	)

Total shareholders’ equity (deficit)					14,000,203			(12,507,190	)		(41,629,135	)		(5,029,434	)

Total liabilities and shareholders’ equity (deficit)					117,889,797			108,924,543			97,254,861			11,749,872

The accompanying notes are an integral part of these consolidated financial statements.

F-4

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002



		Ordinary shares of
		Ctrip.com						Ordinary shares of
		(Hong Kong)						Ctrip.com,				Series A Convertible
		Limited						International Ltd.				Preferred Share
		(US$1 par value)						(US$0.01 par value)				(US$0.01 par value)
																Additional			Deferred			Cumulative					Total
		Number			Par			Number		Par		Number		Par		paid-in			share-based			translation		Accumulated			shareholders’
		of shares			value			of shares		value		of shares		value		capital			compensation			adjustments		deficit			equity (deficit)

					RMB					RMB				RMB		RMB			RMB			RMB		RMB			RMB
Balance as of January 1, 2000 (unaudited)			1,000			7,334			—		—		—		—		—			—			—		(1,001,726	)		(994,392	)
Issuance of ordinary shares of Ctrip.com International, Ltd. in exchange for ordinary shares of Ctrip.com (Hong Kong) Limited			(1,000	)		(7,334	)		8,640,000		715,392		—		—		2,593,525			—			—		—			3,301,583
Issuance of Series A Convertible Preferred Shares			—			—			—		—		4,320,000		357,696		35,870,437			—			—		—			36,228,133
Accretion for Series B Redeemable Convertible Preferred Shares			—			—			—		—		—		—		(2,195,177	)		—			—		—			(2,195,177	)
Loans waived by shareholders			—			—			—		—		—		—		1,614,640			—			—		—			1,614,640
Translation adjustments			—			—			—		—		—		—		—			—			22,851		—			22,851
Net loss			—			—			—		—		—		—		—			—			—		(23,977,435	)		(23,977,435	)

Balance as of December 31, 2000
	(unaudited)		—			—			8,640,000		715,392		4,320,000		357,696		37,883,425			—			22,851		(24,979,161	)		14,000,203

Accretion for Series B Redeemable Convertible Preferred Shares			—			—			—		—		—		—		(14,316,112	)		—			—		—			(14,316,112	)
Issuance of ordinary shares for an acquisition			—			—			880,698		72,922		—		—		2,935,827			—			—		—			3,008,749
Deferred share- based compensation			—			—			—		—		—		—		118,213			(96,263	)		—		—			21,950
Translation adjustments			—			—			—		—		—		—		—			—			39,433		—			39,433
Net loss			—			—			—		—		—		—		—			—			—		(15,261,413	)		(15,261,413	)

Balance as of December 31, 2001			—			—			9,520,698		788,314		4,320,000		357,696		26,621,353			(96,263	)		62,284		(40,240,574	)		(12,507,190	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) — (Continued)

FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002



		Ordinary shares of
		Ctrip.com				Series A Convertible
		International, Ltd.				Preferred Share
		(US$0.01 par value)				(US$0.01 par value)
										Additional			Deferred			Cumulative					Total
		Number of		Par		Number		Par		paid-in			share-based			translation		Accumulated			shareholders’
		shares		value		of shares		value		capital			compensation			adjustments		deficit			equity (deficit)

				RMB				RMB		RMB			RMB			RMB		RMB			RMB
Balance as of January 1, 2002			9,520,698		788,314		4,320,000		357,696		26,621,353			(96,263	)		62,284		(40,240,574	)		(12,507,190	)
Accretion for Series B Redeemable Convertible
	Preferred Shares		—		—		—		—		(16,492,526	)		—			—		—			(16,492,526	)
Deferred share-based compensation			—		—		—		—		1,443,337			(981,197	)		—		—			462,140
Dividends to shareholders			—		—		—		—		(11,572,164	)		—			—		(15,751,832	)		(27,323,996	)
Translation adjustments			—		—		—		—		—			—			38,904		—			38,904
Net income			—		—		—		—		—			—			—		14,193,533			14,193,533

Balance as of December 31, 2002			9,520,698		788,314		4,320,000		357,696		—			(1,077,460	)		101,188		(41,798,873	)		(41,629,135	)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002


		2000
		(unaudited)			2001			2002			2002

											US$
		RMB			RMB			RMB			(Note 2d)
Cash flows from operating activities:
Net income (loss) for the year			(23,977,435	)		(15,261,413	)		14,193,533			1,714,795
Adjustments for:
	Share-based compensation costs		—			21,950			462,140			55,834
	Depreciation and amortization of property, equipment and software		494,900			1,480,249			3,233,381			390,642
	Minority interests		—			—			(70,997	)		(8,578	)
	Amortization of goodwill and other intangible assets		370,822			1,806,611			353,241			42,677
	Share of loss of joint venture companies		—			—			397,824			48,063
Increase in accounts receivable			(1,705,447	)		(5,663,712	)		(6,600,241	)		(797,410	)
Increase in due from related parties			—			—			(2,610,807	)		(315,425	)
(Increase) decrease in prepayments and other current assets			(929,332	)		(2,294,919	)		489,415			59,129
(Increase) decrease in long-term deposits			(829,109	)		127,582			(630,929	)		(76,226	)
(Increase) decrease in deferred tax assets			(7,087,874	)		(2,341,899	)		9,244,836			1,116,917
Increase (decrease) in accounts payable			1,797,037			(1,207,733	)		1,245,705			150,500
Increase (decrease) in due to related parties			1,421,186			1,595,550			(556,705	)		(67,258	)
Increase (decrease) in salary and welfare payable			2,051,304			565,131			(397,500	)		(48,024	)
Increase in taxes payable			128,329			558,980			1,231,439			148,777
Increase in advances from customers			235,096			22,648			1,633,100			197,303
Increase in provisions for customer reward program			109,762			801,764			1,385,877			167,435
(Decrease) increase in other payables and accruals			(663,462	)		(101,564	)		423,510			51,167

Net cash (used in) provided by operating activities			(28,584,223	)		(19,890,775	)		23,426,822			2,830,318

Cash flows from investing activities:
Purchase of property, equipment and software			(4,561,965	)		(5,763,172	)		(13,202,907	)		(1,595,113	)
Increase in long-term loans to related parties			(2,000,000	)		—			(100,000	)		(12,081	)
(Increase) decrease in restricted short-term investment			—			(24,829,800	)		24,829,800			2,999,819
Purchase of a subsidiary			(7,086,150	)		—			—
Purchase of a business			—			—			(2,600,000	)		(314,120	)
Investments in joint venture companies			—			—			(5,500,000	)		(664,484	)

Net cash (used in) provided by investing activities			(13,648,115	)		(30,592,972	)		3,426,893			414,021

Cash flows from financing activities:
Proceeds from (repayment of) short-term bank loan			—			4,000,000			(4,000,000	)		(483,261	)
Proceeds from issuance of Series A Convertible Preferred Shares and Series B Redeemable Convertible Preferred Shares, net of issuance costs of RMB1,025,627 and RMB1,341,133, respectively			128,186,822			—			—			—
Cash received by a subsidiary on issuance of ordinary shares from minority shareholders			—			—			898,958			108,608
Dividends paid			—			—			(27,323,996	)		(3,301,156	)

Net cash provided by (used in) financing activities			128,186,822			4,000,000			(30,425,038	)		(3,675,809	)

Effect of foreign exchange rate changes on cash			22,851			39,433			38,904			4,700
Net increase (decrease) in cash			85,977,335			(46,444,314	)		(3,532,419	)		(426,770	)
Cash, beginning of year			2,930,516			88,907,851			42,463,537			5,130,243

Cash, end of year			88,907,851			42,463,537			38,931,118			4,703,473

Supplemental disclosure of cash flow information
Cash paid during the year for income taxes			—			—			—
Cash paid during the year for interest expense			—			62,058			41,261			4,985
Supplemental schedule of non-cash investing and financing activities:
Issuance of ordinary shares for the acquisition of a subsidiary			—			3,008,749			—			—

The accompanying notes are an integral part of these consolidated financial statements.

F-7

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002

(Amounts expressed in RMB unless otherwise stated)

1. ORGANIZATION AND NATURE OF OPERATIONS

The accompanying consolidated financial statements include the financial statements of Ctrip.com International, Ltd. (the “Company”) and its subsidiaries, which consist of Ctrip.com (Hong Kong) Limited (“Ctrip Hong Kong”), Ctrip Computer Technology (Shanghai) Co., Ltd. (“Ctrip Computer Technology”) and Home Inns & Hotels Management (Hong Kong) Limited (“Home Inns Hong Kong”). The Company and its subsidiaries are collectively referred to as the “Group”.

The Company was incorporated in the Cayman Islands on March 3, 2000 as an exempt company with limited liability under the Companies Law Cap. 22. After the incorporation of the Company, ordinary shares of Ctrip.com International, Ltd. were exchanged for ordinary shares of Ctrip Hong Kong, which owns all the equity interest of Ctrip Computer Technology. Since this reorganization was treated as a transaction among common shareholders, the accompanying consolidated financial statements have been prepared as if the Company had been in operation since the incorporation of Ctrip Hong Kong.

Ctrip Hong Kong and Home Inns Hong Kong were incorporated in Hong Kong on June 11, 1999 and May 28, 2001, respectively. Ctrip Computer Technology was incorporated in the People’s Republic of China (the “PRC”) on January 19, 1994.

The Group is principally engaged in the provision of travel related services including hotel reservations, air-ticketing, packaged-tour services, as well as, to a lesser extent, Internet-related advertising and other related services. The Group has also been engaged in hotel management operations in the PRC through Home Inns Hong Kong.

2. PRINCIPAL ACCOUNTING POLICIES

a. Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.

b. Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation. Investments in joint venture companies are accounted for by the equity method. The Company’s share of income (loss) of the joint venture companies is included in the consolidated statements of operations and comprehensive income (loss).

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to appoint or remove the majority of the members of the board of directors; to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statue or agreement among the shareholders or equity holders.

A joint venture company is an entity under a contractual arrangement whereby the Company and other unrelated parties undertake economic activities, which is subject to joint control and none of the participating parties has unilateral control over the economic activities.

F-8

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

c. Variable interest entities

As of December 31, 2002, the Company conducts a small part of its operations through a series of agreements with certain variable interest entities (“VIE or VIEs”) including Shanghai Ctrip Commerce, Shanghai Huacheng and Beijing Chenhao. These VIEs are used solely to facilitate the Company’s participation in Internet content provision, advertising business, travel agency and air-ticketing services in the PRC where foreign ownership is restricted (Note 15). The Company did not have any ownership or voting interests in these VIEs. In reliance on the existing agreements between the Company and the VIEs as of December 31, 2002, the Company generally had economic control of these entities. However, the VIEs were not consolidated because, given the restrictions and uncertainties in the Chinese regulatory environment, it was questionable whether the contractual agreements that were in place as of December 31, 2002 were enforceable in the PRC courts.

Shanghai Ctrip Commerce is a domestic company incorporated in Shanghai, the PRC. Shanghai Ctrip Commerce holds an Internet content provider (“ICP”) license and advertising license and is primarily engaged in provision of advertising business on the Internet website. A director and senior executive of the Company hold 51% and 49% of the equity interest in Shanghai Ctrip Commerce, respectively. The registered capital of Shanghai Ctrip Commerce is RMB2,000,000.

Shanghai Huacheng is also a domestic company incorporated in Shanghai, the PRC. Shanghai Huacheng holds a domestic travel agency license and an air transport sales agency license and mainly provides local guided tour services. Shanghai Ctrip Commerce holds 90% of the equity interest in Shanghai Huacheng. The registered capital of Shanghai Huacheng is RMB500,000.

Beijing Chenhao is also a domestic company incorporated in Beijing, the PRC. Beijing Chenhao holds an air transport sales agency license and is mainly engaged in the provision of air-ticketing services. A director and senior executive of the Company hold 80% and 20% of the equity interest in Beijing Chenhao, respectively. The registered capital of Beijing Chenhao is RMB500,000.

As of December 31, 2002, the cumulative losses incurred by the VIEs were less than RMB450,000. The aggregate maximum legal exposure for the Company’s involvement with its VIEs as of December 31, 2002 is RMB2,950,000, representing the capital injected by the director or senior executives. The capital injected by the director or senior executives are funded by the Company and were recorded as long-term loans to related parties.

d. Foreign currencies

The Company’s functional currency is the Renminbi (“RMB”). Transactions denominated in currencies other than RMB are translated into RMB at the exchange rates quoted by the People’s Bank of China (the “PBOC”) prevailing at the dates of the transactions. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations and comprehensive income (loss). Monetary assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates quoted by the PBOC at the balance sheet dates. All such exchange gains and losses are included in the statements of operations and comprehensive income (loss). The exchange differences for the translation of group companies balances where RMB is not their functional currency are included in translation adjustments, which is a separate component of shareholders’ equity (deficit) on the consolidated financial statements.

Translations of amounts from RMB into United States dollars (“US$”) are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB8.2771, on September 30, 2003, representing the noon buying rate in the City of New York for cable transfers of RMB, as certified for customs purposes by the Federal Reserve Bank of New York. No representation is intended to imply that the

F-9

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 2003, or at any other rate.

e. Cash

Cash represents cash on hand and demand deposits placed with banks or other financial institutions. Included in the cash balance as of December 31, 2000, 2001 and 2002 are amounts denominated in US$ totaling US$10,142,030; US$4,266,819 and US$1,102,635, respectively (equivalent to approximately RMB83,946,597; RMB35,316,888 and RMB9,126,620, respectively).

f. Short-term investment

As of December 31, 2001, short-term investment represented time deposits placed with a bank, with an original maturity of over three months (Note 9).

g. Property, equipment and software

Property, equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives, taking into account any estimated residual value:


Building		20 years
Leasehold improvements		Lesser of the term of the lease or the estimated useful lives of the assets
Website-related equipment		5 years
Computer equipment		5 years
Furniture and fixtures		3-5 years
Software		5 years

h. Goodwill and other intangible assets

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combination” and SFAS No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 141 requires that all business combinations be accounted for under the purchase method and that certain acquired intangible assets in a business combination be recognized as assets apart from goodwill. SFAS No. 142 requires that ratable amortization of goodwill be replaced with periodic tests of the goodwill’s impairment and that identifiable intangible assets other than goodwill be amortized over their estimated useful lives. The Company adopted SFAS No. 142 in 2002 and performed the initial steps of the transitional impairment tests as required.

Separately identifiable intangible assets that have determinable lives continue to be amortized, and consist primarily of a customer list and a travel supplier agreement. As required under SFAS No. 142, the Company continues to amortize intangible assets on a straight-line basis over their estimated useful lives, which range from one to five years. The Company has prospectively ceased the amortization of goodwill upon the adoption of SFAS No. 142.

No impairment on goodwill and other intangible assets was recognized each of the years ended December 31, 2000, 2001 and 2002.

F-10

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

i. Impairment of long-lived assets

Prior to January 1, 2002, the Company evaluated the recoverability of long-lived assets in accordance with SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of ”. As of January 1, 2002, the Company has adopted SFAS Opinion No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, which addresses the financial accounting and reporting for the recognition and measurement of impairment losses for long-lived assets. In accordance with these standards, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. No impairment of long-lived assets was recognized for each of the years ended December 31, 2000, 2001 and 2002.

j. Long-term loans to related parties

Long-term loans to related parties were made to a director and senior executives of the Company to fund their acquisition or establishment of certain VIEs that are used solely to facilitate the Company’s participation in Internet content provision, advertising business, travel agency and air-ticketing services in the PRC where foreign ownership is restricted. The Company expects that it will continue to be involved in, and provide financial support to, the VIEs. Accordingly, to the extent losses not recoverable are incurred by the VIEs, the Company will accrue for such losses by recording a valuation allowance against long-term loans to related parties.

k. Financial instruments

Financial instruments of the Company primarily comprise of cash, restricted short-term investment, accounts receivable, due from related parties, short-term bank loan, accounts payable, long-term loans to related parties, due to related parties, advances from customers and other payables. As of December 31, 2000, 2001 and 2002, their carrying value approximated their fair value.

l. Provisions for customer reward program

The Company invites its customers to participate in a reward program, which provides travel awards and other gifts to members based on accumulated membership points that vary depending on the services rendered and fees paid. The estimated incremental costs to provide free travel and other gifts are recognized as sales and marketing expense in the statements of operations and comprehensive income (loss) and accrued for as a current liability as members accumulate points. As members redeem awards or their entitlements expire, the provision is reduced correspondingly. As of December 31, 2000, 2001 and 2002, the Company made provisions of RMB109,762, RMB 911,526 and RMB 2,297,403, respectively, based on the estimated liabilities under the customer reward program.

m. Revenue recognition

The Group conducts its principal businesses primarily through Ctrip Computer Technology. Some of the operations of Ctrip Computer Technology are conducted through a series of services and other agreements with certain VIEs, including Shanghai Ctrip Commerce, Shanghai Huacheng and Beijing Chenhao.

Ctrip Computer Technology is subject to business tax and related surcharges on the services provided in the PRC. Such tax is levied on the Ctrip Computer Technology based on gross revenues at the applicable rate of 5.5%. In the statements of operations and comprehensive income, business tax and related surcharges are deducted from gross revenues to arrive at net revenues.

F-11

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Hotel reservation services

The Company receives commissions from travel suppliers for hotel room reservations through the Company’s transaction and service platform. Commissions from hotel reservation services rendered are recognized after hotel customers have completed their stay at the applicable hotel and upon confirmation of pending payment of the commissions by the hotel. Contracts with certain travel suppliers contain incentive commissions typically subject to achieving specific performance targets and such incentive commissions are recognized when it is reasonably assured that the Company is entitled to such incentive commissions. The Company generally receives incentive commissions from monthly arrangements with hotels based on the number of hotel room reservations where customers have completed their stays. The Company presents revenues from such transactions on a net basis in the statements of operations and comprehensive income (loss) as the Company does not assume any inventory risks and generally has no obligations for cancelled hotel reservations.

Air-ticketing services

The Company receives commissions from travel suppliers for air-ticketing services through the Company’s transaction and service platform under various services agreements with related and unrelated parties. Commissions from air-ticketing services rendered are recognized after air tickets are issued and delivered to customers. Contracts with certain travel suppliers contain incentive commissions typically subject to achieving specific performance targets and such incentive commissions are recognized when they are reasonably assured that the Company is entitled to such incentive commissions. The Company presents revenues from such transactions on a net basis in the statements of operations and comprehensive income (loss) as the Company does not assume any inventory risks and generally has no obligations for cancelled airline ticket reservations.

Under the service agreement entered into between Ctrip Computer Technology and Beijing Chenhao, a related party, the Company derives a portion of the revenues on air-ticketing services from services provided to Beijing Chenhao at a fee agreed by both parties. During the years ended December 31, 2000, 2001 and 2002, service fees charged to Beijing Chenhao amounted to nil, nil and RMB1,208,673, respectively.

Packaged tour

The Company receives referral fees from related and unrelated travel agencies for packaged tour services. Referral fees are recognized at net commission after the services are rendered. Under the service agreement entered into between Ctrip Computer Technology and Shanghai Huacheng, a related party, the Company derives a portion of the revenues on packaged tour services from services provided to Shanghai Huacheng at a fee agreed by both parties. During the years ended December 31, 2000, 2001 and 2002, service fees charged to Shanghai Huacheng amounted nil, nil and RMB217,530, respectively.

Other businesses

Other businesses comprise Internet–related advertising services and the sale of VIP membership cards.

Under the service agreement entered into between Ctrip Computer Technology and Shanghai Ctrip Commerce, a related party, the Company derives its advertising revenue from the fees earned from services provided to Shanghai Ctrip Commerce at the price mutually agreed by both parties. Accordingly, the Company recognizes advertising revenue from Shanghai Ctrip Commerce based on the service agreement at the same time as Shanghai Ctrip Commerce recognizes its advertising revenue when services are rendered. During the years ended December 31, 2000, 2001 and 2002, service fees charged to Shanghai Ctrip Commerce amounted to RMB410,878, RMB395,788 and RMB684,675, respectively.

F-12

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenue from the sale of VIP membership cards is recognized when the products are sold, provided that no significant obligations remain for the Company.

n. Costs of services

Costs of services consist primarily of payroll compensation, telecommunication expenses, depreciation, rentals and related expenses incurred by the Company’s transaction and service platform which are directly attributable to the rendering of the Company’s travel related services and other businesses.

o. Product development

Product development costs include expenses incurred by the Company to develop the Company’s travel supplier networks as well as to maintain, monitor and manage the Company’s websites. The Company recognizes website and software development costs in accordance with Statement of Position (“SOP”) No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. As such, the Company expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites or the development of software and websites content. Costs incurred in the development phase are capitalized and amortized over the estimated product life. Since the inception of the Company, the amount of costs qualifying for capitalization has been immaterial and as a result, all website and software development costs have been expensed as incurred.


p.	*Sales and marketing*

Sales and marketing costs consist primarily of costs of advertising expenses, commission fees, production costs of marketing materials, expenses associated with the Company’s customer reward program and payroll and related compensation for the Company’s sales and marketing personnel. Advertising expenses, totaled RMB8,910,378, RMB4,372,030 and RMB4,949,206 during the years ended December 31, 2000, 2001 and 2002, respectively, are charged to the statements of operations and comprehensive income (loss) when incurred.

q. Share-based compensation

The Company accounts for share-based compensation arrangements in accordance with Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB No. 25”), and complies with the disclosure provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”). In general, compensation cost under APB No. 25 is recognized based on the difference, if any, between the estimated fair value of the Company’s ordinary shares and the amount an employee is required to pay to acquire the ordinary shares, as determined on the date the option is granted. Total compensation cost as determined at the grant date of option is recorded in shareholders’ equity as additional paid-in-capital with an offsetting entry recorded to deferred share-based compensation. Deferred share-based compensation is amortized on a straight-line basis and charged to expense over the vesting period of the underlying options.

If the compensation cost for the Company’s share-based compensation plan had been determined based on the estimated fair value at the grant dates for the share option awards as prescribed by SFAS

F-13

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

No. 123, the Company’s net loss attributable to ordinary shareholders and loss per share would have resulted in the pro forma amounts disclosed below:


	2000
	(unaudited)			2001			2002

	RMB			RMB			RMB
Net loss attributable to ordinary shareholders as reported		(26,172,612	)		(29,577,525	)		(19,061,315	)
Add: Adjustments for APB No. 25		—			21,950			462,140
Less: Fair value of share options		—			(46,881	)		(528,074	)

Pro forma net loss attributable to ordinary shareholders		(26,172,612	)		(29,602,456	)		(19,127,249	)

Basic and diluted loss per share
— As reported		(3.03	)		(3.26	)		(2.00	)

— Pro forma		(3.03	)		(3.26	)		(2.01	)

The effects of applying SFAS No. 123 methodology in this pro forma disclosure are not indicative of future amounts. Additional share option awards in future years are expected.

r. Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases net of any incentives received by the Company from the leasing company are charged to the statements of operations and comprehensive income (loss) on a straight-line basis over the lease periods.

s. Taxation

Deferred income taxes are provided using the balance sheet liability method. Under this method, deferred income taxes are recognized for the tax consequences of significant temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of, the deferred tax assets will not be realized.

t. Other income

Other income primarily consists of financial subsidies. During the year ended December 31, 2002, the Company received financial subsidies totaling RMB783,900 from a local government authority and such amount is recorded as other income in the statement of operations and comprehensive income. There are no defined rules and regulations to govern the criteria necessary for companies to enjoy such benefits and the amount of financial subsidy are determined at the discretion of the relevant government authority. Financial subsidies are recognized as other income when received.

u. Statutory reserves

In accordance with the Regulations on Enterprises with Foreign Investment of China and its articles of association, Ctrip Computer Technology, a wholly foreign owned enterprise, is required to allocate at least

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CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10% of its after-tax profit according to Chinese accounting standards and regulations to the general reserve. Ctrip Computer Technology may stop allocations to the general reserve if such reserve has reached 50% of its registered capital. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors of Ctrip Computer Technology. These reserves can only be used for specific purposes and are not transferrable to the Company in form of loans, advances, or cash dividends. During the years ended December 31, 2000, 2001 and 2002, no appropriations to statutory reserves have been made as Ctrip Computer Technology was in an accumulated deficit position.

v. Dividends

Dividends are recognized when declared. The dividends recognized in 2002 totaling RMB27,323,996, representing a return of capital, was distributed to holders of ordinary shares, Series A and Series B convertible preferred shares on a pro rata as-converted basis.

The allocation for the dividends to the then existing holders of ordinary shares, Series A and Series B Convertible preferred shares were RMB10,561,674, RMB4,792,341 and RMB11,969,981, respectively.

w. Earning (loss) per share

In accordance with SFAS No. 128 “Computation of Earnings Per Share” (“SFAS No. 128”), basic earning (loss) per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earning (loss) per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the convertible preference shares (using the as-converted method) and ordinary shares issuable upon the exercise of outstanding share options (using the treasury stock method). Ordinary equivalent shares in the diluted earning (loss) per share computation are excluded in net loss periods as their effect would be anti-dilutive.

w. Segment reporting

The Company follows SFAS No. 131 “Disclosures about Segment of an Enterprise and Related Information”.

The Company operates and manages its business as a single segment. The Company primarily generates its revenues from customers in China. Accordingly, no geographical segments are presented.

x. Recent accounting pronouncements

In June 2001, the FASB issued SFAS No. 143 “Accounting for Asset Retirement Obligations” which addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 requires an entity to recognize an asset retirement obligation in the period in which it is incurred, and the entity shall capitalize the asset retirement cost by increasing the carrying amount of the related asset by the same amount as the liability and subsequently allocate that retirement cost to expense over the asset’s useful life. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company does not expect that the adoption of SFAS No. 143 will have a material effect on the Company’s financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure”. SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for companies that voluntarily change to a fair value-based method of accounting for share-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123. The provisions of SFAS No. 148 are effective for fiscal years ending after

F-15

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 15, 2002. The Company has elected to continue to account for share-based compensation under the provisions of APB No. 25 and has followed the disclosure requirements under SFAS No. 148.

In April 2002, the FASB issued SFAS No. 145 “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. SFAS No. 145 requires gains and losses on extinguishments of debt to be classified as income or loss from continuing operations, rather than as extraordinary items, as previously required under SFAS Opinion No. 4 “Reporting Gains and Losses from Extinguishment of Debt, an amendment of APB Opinion No. 30”. Extraordinary treatment will be required for certain extinguishments, as provided in APB Opinion No. 30 “Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”. The statement also amended SFAS No. 13 “Accounting for Leases” for certain sale-leaseback transactions and sublease accounting. SFAS No. 145 is effective since January 1, 2003. The adoption of SFAS No. 145 did not have a material effect on the Company’s financial position or results of operations.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”. SFAS No. 146 nullifies Emerging Issues Task Force (“EITF”) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity”, under which a liability for an exit cost was recognized at the date of an entity’s commitment to an exit plan. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized at fair value when the liability is incurred. The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002. The Company does not believe that this announcement will have a significant impact on its financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 requires the recognition of a liability for certain guarantee obligations issued or modified after December 31, 2002. FIN 45 also clarifies disclosure requirements to be made by a guarantor for certain guarantees. The disclosure provisions of FIN 45 are effective for interim periods and fiscal years ending after December 15, 2002. The Company has adopted the disclosure provisions of FIN 45 as of December 31, 2002.

In November 2002, the EITF reached a consensus on Issue No. 00-21, “Revenue Arrangements with Multiple Deliverables” (“EITF No. 00-21”). This issue addresses how revenue arrangements with multiple deliverables should be divided into separate units of accounting and how the arrangement consideration should be allocated to the identified separate accounting units. EITF No. 00-21 is effective for fiscal periods beginning after June 15, 2003. The Company does not believe that this announcement will have a significant impact on its financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” (“FIN 46”). FIN 46 requires certain VIEs to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 is effective for all new VIEs created or acquired after January 31, 2003. For VIEs created or acquired prior to February 1, 2003, FIN 46 must be adopted for the first interim or annual period beginning after June 15, 2003. The Company will fully adopt this announcement during the year ending December 31, 2003 in which the financial statements of Guangzhou Guangcheng, a Variable Interest Entity established on April 28, 2003 in the PRC (Note 19), will be consolidated into the Company’s financial statements on the date of establishment, where the financial statements of Shanghai Ctrip Commerce, Shanghai Huacheng and Beijing Chenhao, all of which were established prior to January 31, 2003, will be consolidated into the Company’s financial statements starting the third quarter of 2003. The Company does not believe that this announcement will have a significant impact on

F-16

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the presentation of its historical financial statements as of and for the years ended December 31, 2000, 2001 and 2002.

In June 2003, the FASB issued SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities”. It is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. All provisions of SFAS No. 149 should be applied prospectively. The Company does not expect that the adoption of SFAS No. 149 will have a material effect on the Company’s financial position or results of operations.

In June 2003, the FASB issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or as an asset in some circumstances). It is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of SFAS No. 150 and still existing at the beginning of the interim period of adoption. Restatement is not permitted. The Company does not expect that the adoption of SFAS No. 150 will have a material effect on the Company’s financial position or results of operations.

z. Certain risks and concentration

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, restricted cash, accounts receivable, due from related parties and prepayments and other current assets. As of December 31, 2000, 2001 and 2002, substantially all of the Company’s cash, restricted cash and short-term investments were held in major financial institutions located in the PRC and in Hong Kong, which management believes are of high credit quality. Accounts receivable are typically unsecured and denominated in RMB, and are derived from revenues earned from operations arising in the PRC. Due from related parties mainly represent amounts lent to directors for the purpose of acquisitions of operations/ businesses and the establishment of various VIEs for the benefits of the Company’s operations.

No individual customer accounted for more than 10% of net revenues during the years ended December 31, 2000, 2001 and 2002. No individual customer accounted for more than 10% of accounts receivable as of December 31, 2000, 2001 and 2002.

3. MAJOR ACQUISITION

On October 18, 2000, the Company acquired Beijing Modern Express Business Travel Services Co. Ltd. (“Beijing Modern Express”), a company incorporated in the PRC, for a total consideration of approximately RMB11,008,749, consisting of 880,698 of the Company’s ordinary shares with an estimated fair value of RMB3,008,749 and a cash consideration of RMB8,000,000. The ordinary shares were issued in July 2001. Accordingly, the estimated fair value of the ordinary shares on the date of acquisition has been recognized as deferred acquisition costs as of December 31, 2000. The acquisition has been accounted for as a purchase business combination and the results of operations from the acquisition date have been included in the Company’s consolidated financial statements.

F-17

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The allocation of the purchase price is as follows:


Cash		913,850
Other current assets		272,463
Property, equipment and software		904,238
Intangible assets —
	Customer list	1,766,206
	Travel supplier agreement	800,000
Goodwill		7,866,449
Current liabilities		(1,514,457	)

Total consideration		11,008,749

The net cash impact due to the acquisition of Beijing Modern Express is as follows:


Cash consideration paid	8,000,000
Less: Cash of Beijing Modern Express	(913,850	)

Net cash outflow upon acquisition of Beijing Modern Express	7,086,150

The excess of purchase price over fair values of tangible and identified intangible acquired assets and liabilities assumed was recorded as goodwill. The estimated useful lives of goodwill and intangible assets acquired are as follows:


		Years

Goodwill			10
Intangible assets —
	Customer list		5
	Travel supplier agreement		1

The Company ceased amortization of goodwill after the adoption of SFAS No. 142.

The following unaudited pro forma consolidated financial information reflects the results of operations for the year ended December 31, 2000, as if the acquisition had occurred on January 1, 2000. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what operating results would have been had the acquisition actually taken place on January 1, 2000, and may not be indicative of future operating results.


	For the year ended
	December 31,
	2000
	(unaudited)

	RMB
Revenues		13,016,096
Loss from operations		31,264,161
Net loss for the year		23,501,437

In February 2002, the Company acquired the air-ticketing business of Beijing Hai’an Air-ticketing Service Company for a total cash consideration of RMB2,600,000.

F-18

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4. RESTRICTED SHORT-TERM INVESTMENT

As of December 31, 2001, restricted short-term investment represents time deposits held with a bank, with an original maturity of over three months, in the amount of US$3,000,000 pledged for a RMB denominated short-term bank loan of RMB4,000,000.

5. PREPAYMENTS AND OTHER CURRENT ASSETS

Components of prepayments and other current assets as of December 31 are as follows:


	2000
	(unaudited)		2001		2002

	RMB		RMB		RMB
Interest receivable		—		1,180,709		—
Employee advances		10,700		55,556		120,226
Inventory for resale		—		792,034		437,240
Rental and other deposits		475,692		1,016,383		986,848
Prepayments for acquisition of property, equipment and software		236,717		—		665,543
Prepayments for rental and advertisement		414,993		397,403		486,871
Others		462,987		453,923		709,865

Total		1,601,089		3,896,008		3,406,593

6. INVESTMENTS IN JOINT VENTURE COMPANIES

During the year ended December 31, 2002, Home Inns Hong Kong, an investment holding company, together with a Chinese joint venture partner, established joint venture companies engaged in hotel management operations in the PRC. Certain details of the joint venture companies as of December 31, 2002 are as follows:


		Percentage
		of equity
		interest
	Place and date of	attributable
Name	incorporation	to the Group	Principal activities

Home Inns & Hotels Management (Beijing) Limited (“Home Inns Beijing”)	The PRC June 28, 2002	55% (indirectly)	Hotel management
Home Inns & Hotels Management (Shanghai) Limited	The PRC November 29, 2002	55% (indirectly)	Hotel management

The operations of the joint venture companies have not been included in the consolidated financial statements as the Group does not exercise effective control over these companies. The joint venture companies are accounted for under the equity method of accounting as the Company does have significant influence over the operations of these companies due to certain substantive participating rights held by the minority shareholders.

F-19

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Combined financial information of the joint venture companies as of and for the year ended December 31, 2002 is as follows:


	2002

	RMB
	(unaudited)
Balance sheet:
Current assets		5,448,470
Less: current liabilities		(2,331,894	)
Non-current assets		6,160,108

Net assets		9,276,684

Statement of operations:
Revenues		4,414,845
Net loss		(723,316	)

In the statements of operations and comprehensive income (loss), other expenses incurred for joint venture companies mainly consist payroll compensation and other expenses incurred by the Company in relation to the development of hotel management operations prior to the establishment of Home Inns Beijing.

According to a board resolution on August 27, 2003, all the Company’s equity interest in Home Inns Hong Kong has been distributed out of the Company’s reserves to the existing holders of Series A and Series B Convertible Preferred Shares and ordinary shares as share dividends on an as-converted basis (Note 19).

7. PROPERTY, EQUIPMENT AND SOFTWARE

Property, equipment and software and its related accumulated depreciation and amortization as of December 31 are as follows:


	2000
	(unaudited)			2001			2002

	RMB			RMB			RMB
Building		—			—			7,189,803
Leasehold improvements		230,729			1,085,036			1,951,462
Website-related equipment		1,052,285			2,203,388			3,662,707
Computer equipment		3,380,837			6,580,180			7,838,315
Furniture and fixtures		657,243			1,153,199			2,649,313
Software		780,700			843,163			471,363
Less: accumulated depreciation and amortization		(813,406	)		(2,293,655	)		(5,055,776	)

Net book value		5,288,388			9,571,311			18,707,187

8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets are attributable to the purchase of Beijing Modern Express and Beijing Hai’an Air-ticketing Service Company (Note 3).

F-20

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Gross carrying amount, accumulated amortization and net book value of the goodwill and other intangible assets as of December 31 are as follows:


		2000
		(unaudited)			2001			2002

		RMB			RMB			RMB
Goodwill			7,866,449			7,866,449			10,466,449
Less: accumulated amortization			(163,897	)		(950,600	)		(950,600	)

Net book value			7,702,552			6,915,849			9,515,849

Other intangible assets —
	Customer list		1,766,206			1,766,206			1,766,206
	Travel supplier agreement		800,000			800,000			800,000

			2,566,206			2,566,206			2,566,206

Less: accumulated amortization —
	Customer list		(73,592	)		(426,833	)		(780,074	)
	Travel supplier agreement		(133,333	)		(800,000	)		(800,000	)

			(206,925	)		(1,226,833	)		(1,580,074	)

Net book value			2,359,281			1,339,373			986,132


		2000
		(unaudited)			2001			2002

		RMB			RMB			RMB
Goodwill at the beginning of the year			—			7,702,552			6,915,849
	additions due to acquisition of businesses		7,866,449			—			2,600,000
	amortization for the year		(163,897	)		(786,703	)		—

Goodwill at the end of the year			7,702,552			6,915,849			9,515,849

The table below shows the effect on net loss attributable to ordinary shareholders and loss per share had SFAS No. 142 been adopted in prior periods:


	2000			2001

	RMB			RMB
Reported net loss attributable to ordinary shareholders		(26,172,612	)		(29,577,525	)
Add back: Amortization of goodwill		163,897			786,703

Adjusted net loss attributable to ordinary shareholders		(26,008,715	)		(28,790,822	)

Reported basic and diluted loss per share		(3.03	)		(3.26	)
Add back: Amortization of goodwill		0.02			0.09

Adjusted basic and diluted loss per share		(3.01	)		(3.17	)

F-21

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The annual estimated amortization expense for the acquired intangible assets for the next five years is as follows:


	Amortization

	RMB
2003		353,241
2004		353,241
2005		279,650
2006		—
2007		—

		986,132

9. SHORT-TERM BANK LOAN

As of December 31, 2001, short-term bank loan represented a RMB4,000,000 bank loan secured by bank deposits of US$3,000,000. The annual interest rate applicable to the bank loan was 6.138%. The short-term bank loan was drawn for working capital purposes.

10. TAXATION

Cayman Islands

Under the current laws of Cayman Islands, the Company is not subject to tax on income or capital gain. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

Hong Kong

The Company’s subsidiaries did not have assessable profits that were earned in or derived from Hong Kong during the years ended December 31, 2000, 2001 and 2002. Therefore, no Hong Kong profit tax has been provided for.

China

The Company’s subsidiary and joint venture companies registered in the PRC are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with relevant income tax laws. In accordance with “Income Tax Law of China for Enterprises with Foreign Investment and Foreign Enterprises”, the applicable EIT rates are 30% plus a local income tax of 3%.

Subsequent to December 31, 2002, Ctrip Computer Technology has applied to the relevant government authorities to obtain the status of a “High New Technology Development Enterprise”. Upon approval by the relevant government authorities and tax bureau, Ctrip Computer Technology would enjoy a preferential EIT rate of 15%. However, as of the date of the issuance of these financial statements, there is no assurance that such preferential tax rate will be granted to Ctrip Computer Technology.

F-22

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Composition of income tax benefit (expense)

The current and deferred portion of income tax benefit (expense) included in the consolidated statements of operations and comprehensive income (loss) for the years ended December 31 are as follows:


	2000
	(unaudited)		2001		2002

	RMB		RMB		RMB
Current income tax		—		—		(797,788	)
Recognition (utilization) of deferred tax assets		7,087,874		2,341,899		(9,244,836	)

Income tax benefit (expense)		7,087,874		2,341,899		(10,042,624	)

Reconciliation of the differences between statutory tax rate and the effective tax rate

A reconciliation between the statutory EIT rate and the Group’s effective tax rate for the years ended December 31 is as follows:


	2000
	(unaudited)			2001			2002

Statutory EIT rate		33	%		33	%		33	%
Non-deductible expenses incurred outside the PRC		(7	)%		(21	)%		7	%
Other non-deductible expenses		(3	)%		1	%		1	%

Effective EIT rate		23	%		13	%		41	%

Significant components of deferred tax assets


	2000
	(unaudited)		2001		2002

	RMB		RMB		RMB
Tax loss carryforwards		7,459,858		8,739,932		—
Temporary differences		36,222		1,098,047		593,143
Less: valuation allowance		—		—		—

Deferred tax assets		7,496,080		9,837,979		593,143

The Company has not recorded a valuation allowance related to deferred tax assets. During the years ended December 31, 2000 and 2001, the Company had operating loss and credit carryforwards for income tax purposes aggregating RMB22,605,630 and RMB26,484,642, which expire in 2004 through 2005 and expire in 2004 through 2006, respectively. The tax loss carryforwards were fully utilized during the year ended December 31, 2002.

11. SERIES A CONVERTIBLE PREFERRED SHARES

In March 2000, the Company entered into a Series A Preferred Share Subscription Agreement, whereby the Company authorized and issued 432,000 shares of the Company’s Series A Convertible Preferred Shares (“Series A Preferred Shares”) at an issue price of $10.4167 per share. In June 6, 2000, the Company increased the number of Series A Preferred Shares from 432,000 shares to 4,320,000 shares by decreasing the par value from US$0.10 each to US$0.01 each. The authorized and issued Series A Preferred Shares was increased to 4,320,000 shares accordingly.

F-23

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The holders of Series A Preferred Shares had various rights and preferences as follows:


	Voting

Each holder of Series A Preferred Shares had voting rights equal to the number of ordinary shares then issuable upon its conversion into ordinary shares. Each holder of Series A Preferred Shares generally voted together with holders of the ordinary shares.

Dividends

The holders of the Series A Preferred Shares shall be entitled to receive out of any funds legally available therefore, when and if declared by the Board of Directors of the Company, dividends equal to five percent (5%) of initial conversion price. No dividends or distribution shall be payable except out of the profits of the Company, realized or unrealized, or out of the share premium account or as otherwise permitted.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, after setting aside or paying in full the Series B Preferred Shares liquidation preference, the holders of the Series A Preferred Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the ordinary shares or any other class or series of shares by reason of their ownership of such shares, the amount equal to US$1.0417 (the “Series A Preferred Shares Liquidation Preference”) for each shares held and, plus declared but unpaid dividends.

Conversion

Each Series A Preferred Share shall automatically be converted into ordinary shares at the then effective conversion price, respectively, upon the closing of an underwritten public offering of the ordinary shares of the Company in the United States at a price not less than US$4.70 per share proportionally adjusted for share subdivisions, share dividends, reorganizations, reclassifications, consolidations, or mergers, with the gross proceeds to the Company in excess of US$25,000,000, or in a similar public offering of the ordinary shares of the Company in a jurisdiction and on a recognized securities exchange outside of the United States, provided that such public offering is reasonably equivalent to the aforementioned public offering in the United States in terms of price, offering proceeds and regulatory approval. Otherwise, a holder of Series A Preferred Shares may opt to convert all but not part at any time after issuance date into such number of fully paid and non-assessable ordinary shares at a conversion price of US$1.04167 (each Series A Convertible Preferred Share is convertible into one ordinary share). No beneficial conversion feature charge was recognized for the issuance of Series A Preferred Shares as the estimated fair value of the ordinary shares is less than the conversion price on the date of issuance.

12. SERIES B REDEEMABLE CONVERTIBLE PREFERRED SHARES

In November 2000, the Company entered into a Series B Preferred Shares Subscription Agreement, whereby the Company authorized and issued 7,193,464 shares of the Company’s Series B Mandatorily Redeemable Convertible Preferred Shares (“Series B Preferred Shares”) at an issue price of US$1.5667 per share.

The holders of Series B Preferred Shares had various rights and preferences as follows:

Voting

F-24

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Preferred Shares conversion price as of December 31, 2001, each holder of Series B Preferred Shares shall be entitled to one and a half (1.5) times the number of votes equal to the number of ordinary shares. Each holder of Series B Preferred Shares generally voted together with holders of the ordinary shares.

Dividends

No dividends, whether in cash, in property or in ordinary shares of the Company can be declared on outstanding ordinary shares unless the Board of Directors has declared a dividend for Series B Preferred Share. No dividends or distribution shall be payable except out of the profits of the Company, realized or unrealized, or out of the share premium account or as otherwise permitted.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of Series B Preferred Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus of the Company to the holders of Series A Preferred Shares and ordinary shares or any other class or series of shares by reason of their ownership of such shares, the amount equal to US$1.5667.

Conversion

Each share of Series B Preferred Shares shall automatically be converted into ordinary shares at the then effective conversion price, upon the closing of an underwritten public offering of the ordinary shares of the Company in the United States at a price not less than US$4.70 per share proportionally adjusted for share subdivisions, share dividends, reorganizations, reclassifications, consolidations, or mergers, with the gross proceeds to the Company in excess of US$25,000,000, or in a similar public offering of the ordinary shares of the Company in a jurisdiction and on a recognized securities exchange outside of the United States, provided that such public offering is reasonably equivalent to the aforementioned public offering in the United States in terms of price, offering proceeds and regulatory approval. Otherwise, a holder of Series B Preferred Shares may opt to convert each share at any time after issue date into such number of fully paid and non-assessable ordinary shares at a conversion price of US$1.5667 prior to December 31, 2001. Subsequently, the conversion price was adjusted to US$1.0445 (each Series B Convertible Preferred Share is convertible into 1.5 ordinary shares) in accordance with a formula as determined by the Subscription Agreement of Series B Preference Shares with reference to the net revenue as shown in year 2001 audited consolidated financial statements, prepared under accounting principles generally accepted in Hong Kong. No beneficial conversion feature charge was recognized for the issuance of Series A Preferred Shares as the estimated fair value of the ordinary shares is less than the conversion price on the date of issuance.

Redemption

At any time commencing five calendar years after the Series B Preferred Shares issue date, each Series B Preferred Share shall be redeemable at the option of the holders of a majority of the then outstanding shares of Series B Preferred Shares, out of funds legally available, therefore including capital, at a redemption price equal to US$3.13334 per share plus all declared but unpaid dividends.

On September 4, 2003, holders of Series B Preferred Shares agreed to forfeit its redemption rights for no consideration (Note 19).

13. SHARE OPTION PLAN

F-25

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Directors. Under the share option plan, the directors may, at their discretion, grant any senior executives (including directors) and employees of the Company and/or its subsidiaries to take up share options to subscribe for shares. These share options are vested over a period of 3 years and can be exercised within 5 years from the date of grant. On June 6, 2000, the Company increased the number of ordinary shares from 2,000,000 shares to 20,000,000 shares by decreasing the par value from US$0.10 each to US$0.01 each. The total number of ordinary shares reserved for the share option plan increased from 144,000 to 1,440,000 accordingly. On July 1, 2001, the total number of ordinary shares reserved for the share option plan was increased to 1,728,000 shares. All share options granted under this plan have an exercise price of US$0.7716. Up to the date of the issuance of these financial statements, 1,538,160 options were granted under this share option plan.

The following table summarizes the Company’s share option activity:


	2000
	(unaudited)			2001			2002

Outstanding at beginning of year		—			1,422,280			1,330,100
Granted		1,868,680			207,080			253,440
Exercised		—			—			—
Forfeited		(446,400	)		(299,260	)		(134,820	)

Outstanding at end of year		1,422,280			1,330,100			1,448,720

Vested and exercisable at end of year		—			394,978			803,425

In connection with the share options granted during the years ended December 31, 2000, 2001 and 2002, the Company recognized deferred share-based compensation totaling nil, RMB96,263 and RMB1,077,460, respectively, which is being amortized over the vesting period of three years. Share-based compensation expense recognized during the years ended December 31, 2000, 2001 and 2002, totaled nil, RMB21,950 and RMB462,140, respectively.

The Company calculated the estimated fair value of share options on the date of grant using the Black-Scholes pricing method with the following assumptions:


	2000
	(unaudited)			2001			2002

Risk-free interest rate		2.65	%		2.65	%		2.65	%
Expected life (years)		5			5			5
Expected dividend yield		0			0			0
Volatility		0			0			0
Fair value of options at grant date	US$	nil		US$	0.0145		US$	0.8628
	US$	nil		US$	0.3375		US$	1.1311

If compensation cost for the Company’s share-based compensation plan been determined based on the estimated fair value at the grant dates for the share option awards as prescribed by SFAS No. 123, the Company’s net loss attributable to ordinary shareholders during the years ended December 31, 2000, 2001 and 2002 will be RMB26,172,612, RMB29,602,456 and RMB2,364,927, respectively.

14. EMPLOYEE BENEFITS

The full-time employees of Ctrip Computer Technology which was established in the PRC are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits. Ctrip Computer Technology is required to accrue for these benefits based on certain percentages of the employees’ salaries in accordance with the relevant regulations and make contributions to

F-26

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the state-sponsored pension and medical plans out of the amounts accrued for medical and pension benefits. The total provision accrued for such employee benefits amounted to RMB1,026,011, RMB2,793,619 and RMB3,458,859 for the years ended December 31, 2000, 2001 and 2002, respectively. The Chinese government is responsible for the medical benefits and ultimate pension liability to these employees.

15. RELATED PARTY TRANSACTIONS

Certain VIEs were considered related parties as these VIEs were owned by a director and senior executives of the company. These VIEs own certain licenses that are necessary for a certain part of the Group’s operation. The Company has entered into various service agreements with these VIEs which generally charge a fee agreed by both parties (Note 2(c)).

Under the service agreements, the Company provides consulting and other support on technology, administrative, marketing and other services to the VIE and charges a service fee for those services rendered. Under the terms of the service agreements with Beijing Chenhao and Ctrip Commerce, Beijing Chenhao and Ctrip Commerce are not allowed to (i) receive similar services from other parties or (ii) transfer, sell, leave, or pledge its assets without the consent of the Company. The terms of the service agreements with Shanghai Huacheng and Beijing Chenhao expire in April 2004 and June 2004, respectively. The service agreement with Ctrip Commerce can be terminated by the Company without cause.

During the years ended December 31, significant related party transactions are as follows:


	2000
	(unaudited)		2001		2002

	RMB		RMB		RMB
Service fees from Beijing Chenhao		—		—		1,208,673
Service fees from Shanghai Huacheng		—		—		217,530
Service fees from Shanghai Ctrip Commerce		410,878		395,788		684,675
Commission income from joint venture companies		—		—		163,548
Rental expense to a related party		51,000		—		—
Property, equipment and software purchased from a related party		186,000		—		—
Consulting fees to a related party		100,000		—		—
Payables waived by directors and senior executives		1,614,640		—		—

As of December 31, balances with related parties are as follows:


			2000
			(unaudited)		2001		2002

			RMB		RMB		RMB
Due from related parties:
	Due from VIEs — Shanghai Huacheng			—		—		747,283
		— Beijing Chenhao		—		—		1,863,524

				—		—		2,610,807

	Long-term loans to related parties:
		— Director and senior executives		2,000,000		2,000,000		2,100,000

	Due to related parties:
	Due to VIEs — Shanghai Ctrip Commerce			212,017		1,504,283		1,250,862
		— Shanghai Huacheng		—		303,284		—

				212,017		1,807,567		1,250,862

F-27

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The amounts due from and due to related parties as of December 31, 2000, 2001 and 2002, mainly arose from the transactions disclosed above and in Note 2(i), revenue received and expenses paid on behalf on each other. They are unsecured, interest-free and have no fixed repayment terms.

16. OTHER PAYABLES AND ACCRUALS

Components of other payables and accruals as of December 31 are as follows:


	2000
	(unaudited)		2001		2002

	RMB		RMB		RMB
Deposits received from suppliers		265,000		492,000		403,046
Accrued expenses		765,440		1,124,176		1,466,130
Accrued share issuance costs		869,400		—		—
Others		111,328		293,428		463,938

Total		2,011,168		1,909,604		2,333,114

17. LOSS PER SHARE

Basic loss per share and diluted loss per share have been calculated in accordance with SFAS No. 128 as follows:


	2000
	(unaudited)			2001			2002

	RMB			RMB			RMB
Net loss (Numerator for basic and diluted loss per share — net loss attributable to ordinary shareholders)		(26,172,612	)		(29,577,525	)		(19,061,315	)

Denominator for basic loss per share — weighted average ordinary shares outstanding		8,640,000			9,080,349			9,520,698
Effect of dilutive securities		—			—			—

Denominator for diluted loss per share — weighted average number of ordinary shares and dilutive potential ordinary shares		8,640,000			9,080,349			9,520,698

Basic and diluted loss per share		(3.03	)		(3.26	)		(2.00	)

Potentially dilutive securities that were not included in the computation of diluted loss per share because of their antidilutive effects include Series A Preferred Shares, the Series B Preferred Shares and share options granted to employees.

F-28

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

18. COMMITMENTS AND CONTINGENCIES

Operating lease commitments

The Group has entered into leasing arrangements relating to office premises, equipment and others that are classified as operating leases. Future minimum lease payments for non-cancelable operating leases at December 31 are as follows:


	Office		Equipment
	premises		and others		Total

	RMB		RMB		RMB
2003		2,417,629		4,547,548		6,965,177
2004		1,805,552		430,802		2,236,354
2005		54,291		7,500		61,791
2006		—		—		—
2007		—		—		—

		4,277,472		4,985,850		9,263,322

Rental expense totaled approximately RMB2,843,141, RMB4,798,074 and RMB4,687,822 during the years ended December 31, 2000, 2001 and 2002, respectively, and is charged to the statements of operations and comprehensive income (loss) when incurred.

Capital commitments

As of December 31, 2002, capital commitments for office decoration amounted to RMB579,045.

Contingencies

The Company is incorporated in Cayman Islands and considered as a foreign entity under PRC laws. Due to the restrictions on foreign ownership of the air-ticketing, travel agency, advertising and Internet content provision businesses, the Company conducts these businesses partly through various VIEs. These VIEs hold the licenses and approvals that are essential for the Company’s business operations. In the opinion of the Company’s PRC legal counsel, the current ownership structures and the contractual arrangements with these VIEs and their shareholders as well as the operations of these VIEs are in compliance with all existing PRC laws, rules and regulations. However, there may be changes and other developments in PRC laws and regulations. Accordingly, the Company cannot be assured that PRC government authorities will not take a view in the future contrary to the opinion of the Company’s legal counsel. If the current ownership structures of the Company and its contractual arrangements with VIEs were found to be in violation of any existing or future PRC laws or regulations, the Company may be required to restructure its ownership structure and operations in China to comply with changing and new Chinese laws and regulations.

19. SUBSEQUENT EVENTS

a. On February 28, 2003, Home Inns Hong Kong entered into a Series A Preferred Shares Purchase Agreement, whereby Home Inns Hong Kong authorized and issued 86,207 shares of Series A Convertible Preferred Shares at an issue price of US$46.40 per share. Following the issue of the preferred shares and according to the shareholders’ agreement, the equity interest of the Company on an as converted basis dropped to 31.16% and the investors are entitled to appoint the majority of directors on the board of Home Inns Hong Kong. The Company ceased to have control over Home Inns Hong Kong on February 28, 2003, and accordingly the investment in Home Inns Hong Kong is accounted for by equity method thereafter.

F-29

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

b. On February 28, 2003, Home Inns Hong Kong has contributed an additional registered capital of RMB28,945,000 into Home Inns Beijing. The effective equity interest of Home Inns Hong Kong in Home Inns Beijing increased from 55% to 76%.

c. On March 13, 2003, Ctrip.com Travel Information Technology (Shanghai) Co., Ltd. (“Ctrip Travel Information”), a wholly-owned subsidiary of the Company, was established in Shanghai, PRC. Effective April 2003, Ctrip Computer Technology transferred a certain portion of the hotel reservation business to Ctrip Travel Information. The EIT rate applicable to Ctrip Travel Information is 15% as it is registered in Pudong New District, Shanghai.

d. On April 15, 2003, the Company adopted a new share option plan which provides for the issuance of up to 1,187,510 ordinary shares. Under the share option plan, the directors may, at their discretion, grant any senior executives (including directors) and employees of the Company and/or its subsidiaries to take up share options to subscribe for shares. These share options are vested over a period of 3 years and can be exercised within 5 years from the date of grant. Up to the date of the issuance of these financial statements, 711,660 share options were granted with an exercise price of US$2.11 under this new share option plan.

e. On April 28, 2003, Guangzhou Guangcheng Commercial Service Co., Ltd. (“Guangzhou Guangcheng”), a VIE incorporated in Guangzhou, PRC, was established by Shanghai Ctrip Commerce and a senior executive, each holding 90% and 10% of the equity interest in Guangzhou Guangcheng, respectively. Guangzhou Guangcheng is in the process of applying for an air-ticketing license.

f. On August 4, 2003, the Company, through its senior executive, entered into an agreement to acquire 66% of equity interests of Shanghai Cuiming International Travel Agency Co., Ltd. (“Shanghai Cuiming”), a company incorporated in Shanghai, PRC, with a consideration of RMB1,980,000. Shanghai Cuiming holds a travel agency license for both cross border and domestic package-tour business. The Company is in the process of entering into a service agreement with Shanghai Cuiming. However, these transactions have not yet been completed as of the date of the issuance of these financial statements.

g. On August 27, 2003, the board resolved to distribute, out of the Company’s reserves, all equity interest of the Company in Home Inns Hong Kong to the existing holders of Series A and Series B Convertible Preferred Shares and ordinary shares as share dividends on an as-converted basis.

h. On September 4, 2003, the Company entered into a Series C Preferred Shares Purchase Agreement, whereby the Company authorized and issued 2,180,755 shares of Series C Convertible Preferred Shares, with a par value of US$0.01, at an issue price of US$4.5856 per share. Series C Convertible Preferred Shares are non-redeemable and are automatically convertible into one ordinary share at an initial conversion price of US$4.5856 (subject to anti-dilution adjustment) upon (i) the election of a majority of the outstanding shares of Series C Convertible Preferred Shares or (ii) the consummation of an underwritten public offering with aggregate proceeds in excess of US$25,000,000. Holders of Series C Convertible Preferred Shares are entitled to participate with holders of ordinary shares in any dividends or similar distributions on an as-converted basis. In the event of any liquidation, dissolution or winding-up of the Company, holder of Series C Convertible Preferred Shares are entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the ordinary shares or any other class of series of shares. No beneficial conversion feature charge was recognized for the issuance of Series C Convertible Preferred Shares as the estimated fair value of the ordinary shares is less than the conversion price on the date of issuance.

i. In September 2003, as part of the Series C Convertible Preferred Share issuance, the shareholders of the Company’s Series B Preferred Shares forfeited their redemption rights for no consideration in anticipation of the public offering of the Company’s ordinary shares.

F-30

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

j. In September 2003, immediately after the issuance of Series C Convertible Preferred Shares, the net proceeds received from investors were fully utilized to repurchase 842,938, 382,482 and 636,891 shares of Company’s ordinary shares, Series A Convertible Preferred Shares and Series B Convertible Preferred Shares at US$4.5282, US$4.5282 and US$6.7924, respectively, on a pro-rata as-converted basis. The repurchase price per share for each class of shares was determined based on the issuance price of Series C Preferred Shares adjusted for legal and other professional service expenses and conversion features, where applicable. The excess of the repurchase price over the carrying amount of the Series A and Series B Convertible Preferred Shares was treated as a deemed dividend and amounted to RMB11,223,324 and RMB24,112,826, respectively. The purchased shares were retired upon repurchase.

F-31

REPORT OF INDEPENDENT AUDITORS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

CTRIP.COM INTERNATIONAL, LTD.:

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations and comprehensive income, of changes in shareholders’ equity and of cash flows expressed in Renminbi present fairly, in all material respects, the financial position of Ctrip.com International, Ltd. as of September 30, 2003, and the results of its operations and its cash flows for the nine-month period ended September 30, 2003, in conformity with generally accepted accounting principles in the United States of America. These financial statements are the responsibility of Ctrip.com International, Ltd.’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers

Shanghai, People’s Republic of China

October 30, 2003

F-32

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2003


				For the
				nine-month			For the			For the
				period ended			nine-month			nine-month
				September 30,			period ended			period ended
				2002			September 30,			September 30,
		Note		(unaudited)			2003			2003

				RMB			RMB			US$
										(Note 2d)
Revenues:
	Hotel reservation				67,221,566			95,528,052			11,541,246
	Air-ticketing				3,342,852			11,647,949			1,407,250
	Packaged tour				390,215			1,735,043			209,620
	Others				1,483,571			2,415,036			291,773

Total revenues					72,438,204			111,326,080			13,449,889

Less: business tax and related surcharges					(3,628,998	)		(5,609,269	)		(677,685	)

Net revenues					68,809,206			105,716,811			12,772,204

Costs of services					(9,100,511	)		(14,447,164	)		(1,745,438	)

Gross profit					59,708,695			91,269,647			11,026,766

Operating expenses:
	Product development				(9,170,139	)		(13,254,566	)		(1,601,354	)
	Sales and marketing				(23,519,885	)		(28,401,278	)		(3,431,308	)
	General and administrative				(11,173,090	)		(12,432,604	)		(1,502,048	)
	Share-based compensation*		11		(336,127	)		(1,030,843	)		(124,541	)
	Amortization of goodwill and other intangible assets				(264,931	)		(264,931	)		(32,008	)
	Other expenses incurred for joint venture companies		4		(915,056	)		—			—

Total operating expenses					(45,379,228	)		(55,384,222	)		(6,691,259	)

Income from operations					14,329,467			35,885,425			4,335,507

Interest income					216,972			242,577			29,307
Interest expense					(41,261	)		—			—
Other income, net					263,044			3,474,706			419,797

Income before income tax expense, minority interests and share of income (loss) of joint venture companies					14,768,222			39,602,708			4,784,611

Income tax expense			7		(6,155,572	)		(10,966,291	)		(1,324,895	)
Minority interests					31,594			(17,540	)		(2,119	)
Share of income (loss) of joint venture companies			4		(187,931	)		573,423			69,278

Net income for the period					8,456,313			29,192,300			3,526,875

Accretion for Series B Redeemable Convertible Preferred Shares					(12,140,355	)		(12,365,534	)		(1,493,945	)
Deemed dividends to holders of Series A and Series B Convertible Preferred Shares for spin-off of joint venture companies			2u		—			(2,829,064	)		(341,794	)
Deemed dividends upon repurchase of Preferred Shares			10		—			(35,336,150	)		(4,269,146	)

Net loss attributable to ordinary shareholders					(3,684,042	)		(21,338,448	)		(2,578,010	)

Other comprehensive income:
	Translation adjustments				39,803			86,670			10,471

Comprehensive income					8,496,116			29,278,970			3,537,346

Loss per share			15
— Basic and diluted					(0.39	)		(2.26	)		(0.27	)

Weighted average ordinary shares outstanding
— Basic and diluted					9,520,698			9,439,526			9,439,526

* Share-based compensation was related to the associated operating expense categories as follows:
	Product development				(94,640	)		(254,072	)		(30,696	)
	Sales and marketing				(22,497	)		(81,997	)		(9,906	)
	General and administrative				(218,990	)		(694,774	)		(83,939	)

					(336,127	)		(1,030,843	)		(124,541	)

The accompanying notes are an integral part of these financial statements.

F-33

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2002 AND 2003


										September 30,						September 30,
										2003						2003
				September 30,						(unaudited						(unaudited
				2002			September 30,			pro forma -			September 30,			pro forma -
		Note		(unaudited)			2003			Note 16)			2003			Note 16)

				RMB			RMB			RMB			US$			US$
													(Note 2d)			(Note 2d)
ASSETS
Current assets:
	Cash				61,488,096			70,352,608			70,352,608			8,499,669			8,499,669
	Accounts receivable				12,962,938			25,536,956			25,536,956			3,085,254			3,085,254
	Due from related parties		13		5,912,762			545,270			545,270			65,877			65,877
	Prepayments and other current assets		3		3,348,439			8,110,991			8,110,991			979,931			979,931
	Deferred tax assets, current		7		3,682,407			684,155			684,155			82,656			82,656

Total current assets					87,394,642			105,229,980			105,229,980			12,713,387			12,713,387

Investments in joint venture companies			4		5,314,195			—			—			—			—
Long-term loans to related parties			13		2,100,000			4,290,000			4,290,000			518,298			518,298
Long-term deposits					850,997			9,276,454			9,276,454			1,120,737			1,120,737
Property, equipment and software			5		11,420,189			22,965,842			22,965,842			2,774,624			2,774,624
Goodwill			6		9,515,849			9,515,849			9,515,849			1,149,660			1,149,660
Other intangible assets			6		1,074,442			721,201			721,201			87,132			87,132

Total assets					117,670,314			151,999,326			151,999,326			18,363,838			18,363,838

LIABILITIES
Current liabilities:
	Accounts payable				2,312,223			14,393,027			14,393,027			1,738,897			1,738,897
	Due to related parties		13		1,511,946			—			—			—			—
	Salary and welfare payable				3,749,423			5,013,383			5,013,383			605,693			605,693
	Taxes payable				1,241,576			10,492,243			10,492,243			1,267,623			1,267,623
	Advances from customers				197,591			2,002,790			2,002,790			241,968			241,968
	Provisions for customer reward program		2k		1,869,656			3,470,457			3,470,457			419,284			419,284
	Other payables and accruals		14		1,480,392			7,538,601			7,538,601			910,778			910,778

Total current liabilities					12,362,807			42,910,501			42,910,501			5,184,243			5,184,243

Minority interests					512,476			57,266			57,266			6,919			6,919
Series B Redeemable Convertible Preferred Shares (US$0.01 par value; 7,193,464 shares authorized, issued and outstanding as of September 30, 2002)			9		120,610,333			—			—			—			—
Commitments and contingencies			17		—			—			—			—			—
Shareholders’ equity (deficit)
	Share capital (US$0.01 par value; 40,000,000 shares authorized, 9,520,698 shares issued and outstanding as of September 30, 2002; 49,157,064 shares authorized, 8,677,760 issued and outstanding as of September 30, 2003)				788,314			718,522			2,039,447			86,808			246,396
	Series A Convertible Preferred Shares (US$0.01 par value; 4,320,000 shares authorized, issued and outstanding as of September 30, 2002; 3,937,518 shares authorized, issued and outstanding as of September 30, 2003)		8		357,696			326,025			—			39,389			—
	Series B Convertible Preferred Shares (US$0.01 par value; 6,556,573 shares authorized, issued and outstanding as of September 30, 2003)		9		—			542,886			—			65,589			—
	Series C Convertible Preferred Shares (US$0.01 par value; 2,180,755 shares authorized, issued and outstanding as of September 30, 2003)		10		—			180,570			—			21,815			—
	Additional paid-in capital				15,937,815			140,114,159			139,842,715			16,927,929			16,895,134
	Deferred share-based compensation		11		(1,216,953	)		(3,454,731	)		(3,454,731	)		(417,384	)		(417,384	)
	Cumulative translation adjustments				102,087			187,858			187,858			22,696			22,696
	Accumulated deficit				(31,784,261	)		(29,583,730	)		(29,583,730	)		(3,574,166	)		(3,574,166	)

Total shareholders’ equity (deficit)					(15,815,302	)		109,031,559			109,031,559			13,172,676			13,172,676

Total liabilities and shareholders’ equity (deficit)					117,670,314			151,999,326			151,999,326			18,363,838			18,363,838

The accompanying notes are an integral part of these financial statements.

F-34

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2003



							Series A Convertible						Series B Convertible						Series C Convertible
	Ordinary shares						Preferred Share						Preferred Share						Preferred Share
	(US$0.01 par value)						(US$0.01 par value)						(US$0.01 par value)						(US$0.01 par value)
																										Deferred			Cumulative					Total
	Number						Number						Number						Number				Additional			share-based			translation		Accumulated			shareholders’
	of shares			Par value			of shares			Par value			of shares			Par value			of shares		Par value		paid-in capital			compensation			adjustments		deficit			equity (deficit)

				RMB						RMB						RMB					RMB		RMB			RMB			RMB		RMB			RMB
Balance as of January 1, 2002		9,520,698			788,314			4,320,000			357,696			—			—			—		—		26,621,353			(96,263	)		62,284		(40,240,574	)		(12,507,190	)
Deferred share-based compensation		—			—			—			—			—			—			—		—		1,456,817			(1,120,690	)		—		—			336,127
Accretion for Series B Redeemable Convertible Preferred Shares		—			—			—			—			—			—			—		—		(12,140,355	)		—			—		—			(12,140,355	)
Translation adjustments		—			—			—			—			—			—			—		—		—			—			39,803		—			39,803
Net income		—			—			—			—			—			—			—		—		—			—			—		8,456,313			8,456,313

Balance as of September 30, 2002 (unaudited)		9,520,698			788,314			4,320,000			357,696			—			—			—		—		15,937,815			(1,216,953	)		102,087		(31,784,261	)		(15,815,302	)

Balance as of January 1, 2003		9,520,698			788,314			4,320,000			357,696			—			—			—		—		—			(1,077,460	)		101,188		(41,798,873	)		(41,629,135	)
Accretion for Series B Redeemable Convertible Preferred Shares		—			—			—			—			—			—			—		—		—			—			—		(12,365,534	)		(12,365,534	)
Spin-off of joint venture companies		—			—			—			—			—			—			—		—		—			—			—		(4,611,623	)		(4,611,623	)
Reclassification upon removal of redemption rights for Series B Convertible Preferred Shares		—			—			—			—			7,193,464			595,621			—		—		136,732,417			—			—		—			137,328,038
Issuance of Series C Convertible Preferred Shares		—			—			—			—			—			—			2,180,755		180,570		82,619,430			—			—		—			82,800,000
Repurchase of shares		(842,938	)		(69,792	)		(382,482	)		(31,671	)		(636,891	)		(52,735	)		—		—		(82,645,802	)		—			—		—			(82,800,000	)
Deferred share-based compensation		—			—			—			—			—			—			—		—		3,408,114			(2,377,271	)		—		—			1,030,843
Translation adjustments		—			—			—			—			—			—			—		—		—			—			86,670		—			86,670
Net income		—			—			—			—			—			—			—		—		—			—			—		29,192,300			29,192,300

Balance as of September 30, 2003		8,677,760			718,522			3,937,518			326,025			6,556,573			542,886			2,180,755		180,570		140,114,159			(3,454,731	)		187,858		(29,583,730	)		109,031,559

The accompanying notes are an integral part of these financial statements.

F-35

CTRIP.COM INTERNATIONAL, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2003


		For the
		nine-month			For the			For the
		period ended			nine-month			nine-month
		September 30,			period ended			period ended
		2002			September 30,			September 30,
		(unaudited)			2003			2003

								US$
		RMB			RMB			(Note 2d)
Cash flows from operating activities:
Net income for the period			8,456,313			29,192,300			3,526,875
Adjustments for:
	Share-based compensation costs		336,127			1,030,843			124,541
	Depreciation and amortization of property, equipment and software		2,319,203			3,908,674			472,227
	Minority interests		(31,594	)		17,540			2,119
	Amortization of goodwill and other intangible assets		264,931			264,931			32,008
	Share of loss (income) of joint venture companies		187,931			(573,423	)		(69,278	)
Increase in accounts receivable			(5,593,779	)		(11,567,556	)		(1,397,537	)
(Increase) decrease in due from related parties			(5,912,762	)		3,700,243			447,046
Decrease (increase) in prepayments and other current assets			547,569			(4,704,398	)		(568,363	)
Increase in long-term deposits			(149,470	)		(7,943,998	)		(959,756	)
Decrease (increase) in deferred tax assets			6,155,572			(91,012	)		(10,996	)
Increase in accounts payable			2,556,569			13,391,668			1,617,918
Decrease in due to related parties			(295,621	)		(1,250,862	)		(151,123	)
Increase in salary and welfare payable			970,210			2,631,670			317,946
Increase in taxes payable			535,429			8,554,657			1,033,533
(Decrease) increase in advances from customers			(60,803	)		111,296			13,446
Increase in provisions for customer reward program			958,130			1,173,054			141,723
Decrease in other payables and accruals			(429,212	)		(241,447	)		(29,170	)

Net cash provided by operating activities			10,814,743			37,604,180			4,543,159

Cash flows from investing activities:
Decrease in restricted short-term investment			24,829,800			—			—
Proceeds from disposal of equity interest in a former subsidiary			—			199,962			24,158
Purchase of property, equipment and software			(5,003,857	)		(8,078,728	)		(976,034	)
Increase in long-term loans to related parties			(100,000	)		(2,190,000	)		(264,585	)
Decrease in cash arising from deconsolidation of a former subsidiary			—			(1,789,594	)		(216,210	)
Purchase of a business			(2,600,000	)		—			—
Investments in joint venture companies			(5,500,000	)		—			—

Net cash provided by (used in) investing activities			11,625,943			(11,858,360	)		(1,432,671	)

Cash flows from financing activities:
Cash received by a subsidiary on issuance or ordinary shares from minority shareholders			544,070			—			—
Repayment of short-term bank loan			(4,000,000	)		—			—
Proceeds from issuance of Series C Convertible Preferred Shares			—			82,800,000			10,003,504
Repurchase of ordinary and Series A and B Convertible Preferred Shares			—			(77,211,000	)		(9,328,267	)

Net cash (used in) provided by financing activities			(3,455,930	)		5,589,000			675,237

Effect of foreign exchange rate changes on cash			39,803			86,670			10,471
Net increase in cash			19,024,559			31,421,490			3,796,196
Cash, beginning of period			42,463,537			38,931,118			4,703,473

Cash, end of period			61,488,096			70,352,608			8,499,669

Supplemental disclosure of cash flow information:
Cash paid during the periods for income taxes			—			3,345,114			404,141
Cash paid during the periods for interest expense			41,261			—			—
Supplemental disclosure of non-cash financing activities:
Spin-off of joint venture companies as share dividends			—			4,611,623			557,154
Repurchase of shares unpaid in cash			—			4,843,800			585,205

The accompanying notes are an integral part of these financial statements.

F-36

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2003

(Amounts expressed in RMB unless otherwise stated)

1. ORGANIZATION AND NATURE OF OPERATIONS

The accompanying consolidated financial statements include the financial statements of Ctrip.com International, Ltd. (the “Company”), its subsidiaries and certain variable interest entities (“VIEs” or), which primarily consist of Ctrip.com (Hong Kong) Limited (“Ctrip Hong Kong”), Ctrip Computer Technology (Shanghai) Co., Ltd. (“Ctrip Computer Technology”) and Ctrip Travel Information Technology (Shanghai) Co., Ltd. (“Ctrip Travel Information”). The Company and its subsidiaries and consolidated VIEs are collectively referred to as the “Group”.

The Group is principally engaged in the provision of travel related services including hotel reservations, air-ticketing, packaged tour services, as well as, to a lesser extent, Internet-related advertising and other related services. The Group had also been engaged in hotel management operations in the People’s Republic of China (the “PRC”) through Home Inns & Hotels Management (Hong Kong) Limited (“Home Inns Hong Kong”), a company established on May 28, 2001.

Subsequent to the issuance of convertible preferred shares by Home Inns Hong Kong on February 28, 2003, the Company ceased to have control over Home Inns Hong Kong. Accordingly, investment in Home Inns Hong Kong is accounted for by equity method until August 27, 2003 when all equity interest of the Company in Home Inns Hong Kong was distributed to the then existing holders of Series A and Series B Convertible Preferred Shares and ordinary shares as share dividends on a pro rata as-converted basis.

2. PRINCIPAL ACCOUNTING POLICIES

a. Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

b. Consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries and certain VIEs. All significant transactions and balances among the Company, its subsidiaries and VIEs have been eliminated upon consolidation. Investments in joint venture companies are accounted for by the equity method. The Company’s share of income (loss) of the joint venture companies is included in the consolidated statements of operations and comprehensive income.

The Company has adopted FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” (“FIN 46”). FIN 46 requires certain VIEs to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Accordingly, the financial statements of Guangzhou Guangcheng Commercial Service Co., Ltd. (“Guangzhou Guangcheng”), a VIE established on

F-37

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

April 28, 2003 is consolidated in the Company’s financial statements since its incorporation. Shanghai Ctrip Commerce Co., Ltd. (“Shanghai Ctrip Commerce”), Shanghai Huacheng Southwest Travel Agency Co., Ltd. (“Shanghai Huacheng”) and Beijing Chenhao Xingye Air Ticketing Service Co., Ltd. (“Beijing Chenhao”), all of which were established prior to January 31, 2003, are consolidated in the Company’s financial statements beginning July 1, 2003. The Company has voting control over the VIEs based on the irrevocable powers of attorney and other related agreements between the Company and the principal shareholders of the VIEs, which consist of a director and two officers of the Company (Note 2c). Such director and officers collectively own a 100% interest in all of the VIEs except for Shanghai Huacheng, which is 10% owned by a third party. This 10% interest is accounted for as a minority interest in the consolidated financial statements. The Company has consolidated the assets and liabilities of its VIEs in accordance with transition guidance under FIN 46. Upon consolidation, there were no material difference between the carrying value (as defined in FIN 46) added to the balance sheet and the previously recognized long-term loan balances.

c. Variable interest entities

As of September 30, 2003, the Company conducts a small part of its operations through a series of agreements with its VIEs, including Shanghai Ctrip Commerce, Shanghai Huacheng, Beijing Chenhao and Guangzhou Guangcheng. These VIEs are used solely to facilitate the Company’s participation in Internet content provision, advertising business, travel agency and air-ticketing services in the PRC where foreign ownership is restricted.

Guangzhou Guangcheng is also a domestic company incorporated in Guangzhou, the PRC, which has not commenced operations as of September 30, 2003. Guangzhou Guangcheng holds an air transport sales agency license and is mainly engaged in the provision of air-ticketing services. Two senior executives of the Company hold 100% of the equity interest in Guangzhou Guangcheng. The registered capital of Guangzhou Guangcheng as of September 30, 2003 is RMB500,000.

The capital injected by the director or senior executives are funded by the Company and were recorded as long-term loans to related parties prior to the adoption of FIN 46. The Company does not have any ownership interest in these VIEs.

As of September 30, 2003, the Company has various agreements with its consolidated VIEs, including loan agreements, exclusive technical consulting and services agreements, share pledge agreements, exclusive option agreements and other operating agreements.

F-38

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Details of certain key agreements with our VIEs are as follows:

Powers of Attorney: The equity owners of the VIEs irrevocably appointed the Company’s officers to vote on their behalf on all matters they are entitled to vote on, including matters relating to the transfer of any or all of their respective equity interests in VIEs and the appointment of the chief executive officer of the VIEs.

Share Pledge Agreements. The equity owners pledge their respective equity interests in the VIEs as a guarantee for the payment by the VIEs of technical and consulting services fees under the exclusive technical consulting and services agreements described above.

Exclusive Technical Consulting and Services Agreements. The Company provides the VIEs with technical consulting and related services and information services. The Company is the exclusive provider of these services. The initial term of these agreements is ten years. In consideration for those services, the VIEs agree to pay the Company service fees. Those service fees are recognized as revenues prior to adoption of FIN 46. Upon adoption of FIN 46, the service fees are eliminated upon consolidation.

Loan Agreements. Loans were granted to certain directors and officers with the sole and exclusive purpose of providing funds necessary for the capitalization and acquisition of the VIEs. As soon as the Chinese government lifts its substantial restrictions on foreign ownership of the air-ticketing, travel agency, advertising, or Internet content provision business in China, as applicable, the Company will exercise its exclusive option to purchase all outstanding equity interest of the VIEs and the Loan Agreements will be canceled.

d. Foreign currencies

The Company’s functional currency is the Renminbi (“RMB”). Transactions denominated in currencies other than RMB are translated into RMB at the exchange rates quoted by the People’s Bank of China (the “PBOC”) prevailing at the dates of the transactions. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations and comprehensive income. Monetary assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates quoted by the PBOC at the balance sheet dates. All such exchange gains and losses are included in the statements of operations and comprehensive income. The exchange differences for translation of group companies balances where RMB is not their functional currency are included in translation adjustments, which is a separate component of shareholders’ equity (deficit) on the consolidated financial statements.

e. Cash

Cash represents cash on hand and demand deposits placed with banks or other financial institutions. Included in the cash balance as of September 30, 2002 and 2003 are amounts denominated in US$ amounted to US$4,462,843 and US$1,497,468, respectively (equivalent to approximately RMB36,939,398 and RMB12,394,692, respectively).

F-39

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

f. Property, equipment and software


Building		20 years
Leasehold improvements		Lesser of the term of the lease or the estimated useful lives of the assets
Website-related equipment		5 years
Computer equipment		5 years
Furniture and fixtures		3-5 years
Software		5 years

g. Goodwill and other intangible assets

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combination” (“SFAS No. 141”) and SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). SFAS No. 141 requires that all business combinations be accounted for under the purchase method and that certain acquired intangible assets in a business combination be recognized as assets apart from goodwill. SFAS No. 142 requires that ratable amortization of goodwill be replaced with periodic tests of the goodwill’s impairment and that identifiable intangible assets other than goodwill be amortized over their estimated useful lives. The Company adopted SFAS No. 142 in 2002 and performed the initial steps of the transitional impairment tests as required.

Separate identifiable intangible assets that have determinable lives continue to be amortized, and consist primarily of a customer list and a travel supplier agreement. As required under SFAS No. 142, the Company continues to amortize intangible assets on a straight-line basis over their estimated useful lives, which range from one to five years. The Company has prospectively ceased the amortization of goodwill upon the adoption of SFAS No. 142.

No impairment on goodwill and other intangible assets was recognized each of the nine-month periods ended September 30, 2002 and 2003.

h. Impairment of long-lived assets

Prior to January 1, 2002, the Company evaluated the recoverability of long-lived assets in accordance with SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of”. As of January 1, 2002, the Company has adopted SFAS No. 144,“Accounting for the Impairment or Disposal of Long-Lived Assets”, which addresses the financial accounting and reporting for the recognition and measurement of impairment losses for long-lived assets. In accordance with these standards, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. No impairment of long-lived assets was recognized during the nine-month periods ended September 30, 2002 and 2003.

i. Long-term loans to related parties

Long-term loans to related parties were made to directors and senior executives of the Company to fund their acquisition or establishment of certain VIEs that are used solely to facilitate the Company’s participation in Internet content provision, advertising business, travel agency and air-ticketing services in the

F-40

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

PRC where foreign ownership is restricted. The Company expects that it will continue to be involved in, and provide financial support to, the VIEs. Accordingly, to the extent losses not recoverable are incurred by the VIEs and prior to the adoption of FIN 46, the Company will accrue for such losses by recording a valuation allowance against long-term loans to related parties. Upon adoption of FIN 46, the VIEs are consolidated and our long-term loans to the related parties are eliminated upon consolidation (Note 13).

j. Financial instruments

Financial instruments of the Company primarily comprise of cash, accounts receivable, due from related parties, long-term loans to related parties, accounts payable, due to related parties, advances from customers and other payables. As of September 30, 2002 and 2003, their carrying value approximated their fair value.

k. Provisions for customer reward program

The Company invites its customers to participate in a reward program, which provides travel awards and other gifts to members based on accumulated membership points that vary depending on the services rendered and fees paid. The estimated incremental costs to provide free travel and other gifts are recognized as sales and marketing expense in the statements of operations and comprehensive income and accrued for as a current liability as members accumulate points. As members redeem awards or their entitlements expire, the provision is reduced correspondingly. As of September 30, 2002 and 2003, the Company made provisions of RMB1,869,656 and RMB3,470,457, respectively, based on the estimated liabilities under the customer reward program.

l. Revenue recognition

The Group conducts its principal businesses primarily through Ctrip Computer Technology and Ctrip Travel Information. Some of the operations of Ctrip Computer Technology are conducted through a series of services and other agreements with certain VIEs, including Shanghai Ctrip Commerce, Shanghai Huacheng and Beijing Chenhao.

Ctrip Computer Technology, Ctrip Travel Information and the VIEs are subject to business tax and related surcharges on the services provided in the PRC. Such tax is levied on the group companies in the PRC based on gross revenues at the applicable rate of 5.5%. In the statements of operations and comprehensive income, business tax and related surcharges are deducted from gross revenues to arrive at net revenues.

Hotel reservation services

The Company receives commissions from travel suppliers for hotel room reservations through the Company’s transaction and service platform. Commissions from hotel reservation services rendered are recognized after hotel customers have completed their stay at the applicable hotel and upon confirmation of pending payment of the commissions by the hotel. Contracts with certain travel suppliers contain incentive commissions typically subject to achieving specific performance targets and such incentive commissions are recognized when it is reasonably assured that the Company is entitled to such incentive commissions. The Company generally receives incentive commissions from monthly arrangements with hotels based on the number of hotel room reservations where customers have completed their stay. The Company presents revenues from such transactions on a net basis in the statements of operations and comprehensive income as the Company does not assume any inventory risks and generally has no obligations for cancelled hotel reservations.

F-41

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Air-ticketing services

The Company receives commissions from travel suppliers for air-ticketing services through the Company’s transaction and service platform under various services agreements with related and unrelated parties. Commissions from air-ticketing services rendered are recognized after air tickets are issued and delivered to customers. Contracts with certain travel suppliers contain incentive commissions typically subject to achieving specific performance targets and such incentive commissions are recognized when they are reasonably assured that the Company is entitled to such incentive commissions. The Company presents revenues from such transactions on a net basis in the statements of operations and comprehensive income as the Company does not assume any inventory risks and generally has no obligations for cancelled airline ticket reservations.

Under the service agreement entered into between Ctrip Computer Technology and Beijing Chenhao, a unconsolidated VIE prior to July 1, 2003, the Company derives a portion of the revenues on air-ticketing services from services provided to Beijing Chenhao at a fee agreed between Ctrip Computer Technology and the Beijing Chenhao. During the nine-month periods ended September 30, 2002 and 2003, service fees charged to Beijing Chenhao amounted to RMB548,673 and RMB1,358,612, respectively.

Packaged tour services

The Company receives referral fees from related and unrelated travel agencies for packaged tour services through the Company’s transaction and service platform. Referral fees are recognized at net commission after the services are rendered. Under the service agreement entered into between Ctrip Computer Technology and Shanghai Huacheng, a unconsolidated VIE prior to July 1, 2003, the Company derives a portion of the revenues on the packaged tour services from services provided to Shanghai Huacheng at a fee agreed by both parties. During the periods ended September 30, 2002 and 2003, service fees charged to Shanghai Huacheng amounted to RMB175,746 and RMB140,000, respectively.

Other businesses

Other businesses comprise Internet-related advertising services and the sale of VIP membership cards.

Under the service agreement entered into between Ctrip Computer Technology and Shanghai Ctrip Commerce, a unconsolidated VIE prior to July 1, 2003, the Company derives its advertising revenue from the fees earned from services provided to Shanghai Ctrip Commerce at the price mutually agreed by both parties. During the periods ended September 30, 2002 and 2003, service fees charged to Shanghai Ctrip Commerce amounted to RMB331,925 and RMB678,502, respectfully.

Shanghai Ctrip Commerce receives advertising revenue, which principally represent the sale of banners or sponsorship on the website from customers. Advertising revenues are recognized ratably over the fixed term of the agreement as services are provided.

Revenue from the sale of VIP membership cards is recognized when the products are sold, provided that no significant obligations remain for the Company.

m. Costs of services

Costs of services consist primarily of payroll compensation, telecommunication expenses, depreciation and amortization, rentals and related expenses incurred by the Company’s transaction and service platform which are directly attributable to the rendering of the Company’s travel related services and other businesses.

F-42

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

n. Product development

Product development costs include expenses incurred by the Company to develop the Company’s travel supplier networks as well as to maintain, monitor and manage the Company’s websites. The Company recognizes website and software development costs in accordance with Statement of Position (“SOP”) No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. As such, the Company expenses all costs that are incurred in connection with the planning and implementation phases of development and cost that are associated with repair or maintenance of the existing websites or the development of software and websites content. Costs incurred in the development phase are capitalized and amortized over the estimated product life. Since the inception of the Company, the amount of costs qualifying for capitalization has been immaterial and as a result, all website and software development costs have been expensed as incurred.

o. Sales and marketing

Sales and marketing costs consist primarily of costs of advertising expenses, commission fees, production costs of marketing materials, expenses associated with the Company’s customer reward program and payroll and related compensation for the Company’s sales and marketing personnel. Advertising expenses, amounted to RMB4,572,594 and RMB2,634,119 during the nine-month periods ended September 30, 2002 and 2003, respectively, are charged to the statements of operations and comprehensive income when incurred.

p. Share-based compensation

If the compensation cost for the Company’s share-based compensation plan had been determined based on the estimated fair value at the grant dates for the share option awards as prescribed by SFAS No. 123, the Company’s net loss attributable to ordinary shareholders and loss per share would have resulted in the pro forma amounts for the nine-month periods ended September 30 disclosed below:


	2002
	(unaudited)			2003

	RMB			RMB
Net loss attributable to ordinary shareholders as reported		(3,684,042	)		(21,338,448	)
Add: Adjustments for APB No. 25		336,127			1,030,843
Less: Fair value of share options		(384,225	)		(1,366,465	)

Pro forma net loss attributable to ordinary shareholders		(3,732,140	)		(21,674,070	)

Basic and diluted loss per share
— As reported		(0.39	)		(2.26	)

— Pro forma		(0.39	)		(2.30	)

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CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The effects of applying SFAS No. 123 methodologies in this pro forma disclosure are not indicative of future amounts. Additional share option awards in future years are expected.

q. Operating leases

r. Taxation

s. Other income

Other income primarily consists of financial subsidies. During the nine-month period ended September 30, 2003, the Company received financial subsidies totaling RMB3,354,450 from a local government authority of which RMB922,950 of the subsidies were granted for entities impacted by SARS. Such amount is recorded as other income in the statement of operations and comprehensive income. There are no defined rules and regulations to govern the criteria necessary for companies to enjoy such benefits, and the amount of financial subsidy are determined at the discretion of the relevant government authority. Financial subsidies are recognized as other income when received.

t. Statutory reserves

In accordance with the regulations in China and the articles of association, the Company’s subsidiaries and the VIEs are required to allocate at least 10% of its after-tax profit according to Chinese accounting standards and regulations to the general reserve. The allocations to the general reserve can be stopped if such reserve has reached 50% of their registered capital. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors of Ctrip Computer Technology and Ctrip Travel Information, the subsidiaries of the Company. The VIEs are required to allocate at least 5% of its after-tax profit to the statutory welfare fund. These reserves can only be used for specific purposes and are not transferable to the Company in the form of loans, advances, or cash dividends. As of and for the nine-month period ended September 30, 2003, no appropriation to statutory reserves have been made as the Chinese subsidiaries and VIEs were in an accumulated deficit position as of the most recent fiscal year end, as applicable, and no reserve requirements are necessary during interim periods in accordance with Chinese regulations.

u. Dividends

Dividends are recognized when declared. On August 27, 2003, the Board of Directors of the Company resolved to distribute all equity interest of the Company in Home Inns Hong Kong to the then existing holders of Series A and Series B Convertible Preferred Shares and ordinary shares respectively as dividends on a pro rata as-converted basis, based on the carrying value of the equity interest which was

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CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

RMB4,611,623. The allocation for the dividends to the then existing holders of Series A and Series B Preferred Shares and ordinary shares were RMB808,827, RMB2,020,237 and RMB1,782,559, respectively. The number of shares of Home Inns Hong Kong distributed to the holders of Series A and B Preferred Shares and ordinary shares were 1,543,427 shares, 3,855,067 shares and 3,401,506 shares, respectively.

v. Earning (loss) per share

In accordance with SFAS No. 128 “Computation of Earnings Per Share” (“SFAS No. 128”), basic earning (loss) per share is computed by dividing net profit (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earning (loss) per share is calculated by dividing net profit (loss) attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the convertible preference shares (using the as-converted method) and ordinary shares issuable upon the exercise of outstanding share options (using the treasury stock method). Ordinary equivalent shares in the diluted earning (loss) per share computation are excluded in net loss periods, as their effect would be anti-dilutive.

w. Segment reporting

The Company follows SFAS No. 131 “Disclosures about Segment of an Enterprise and Related Information”.

The Company operates and manages its business as a single segment. The Company primarily generates its revenues from customers in China. Accordingly, no geographical segments are presented.

x. Recent accounting pronouncements

In June 2001, the FASB issued SFAS No. 143 “Accounting for Asset Retirement Obligations” (“SFAS No. 143”) which addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 requires an entity to recognize an asset retirement obligation in the period in which it is incurred, and the entity shall capitalize the asset retirement cost by increasing the carrying amount of the related asset by the same amount as the liability and subsequently allocate that retirement cost to expense over the asset’s useful life. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company does not expect that the adoption of SFAS No. 143 will have a material effect on the Company’s financial position or results of operations.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS No. 146”). SFAS No. 146 nullifies Emerging Issues Task Force (“EITF”) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity”, under which a liability for an exit cost was recognized at the date of an entity’s commitment to an exit plan. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized at fair value when the liability is incurred. The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002. The Company does not believe that this announcement will have a significant impact on its financial statements.

In April 2002, the FASB issued SFAS No. 145 “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections” (“SFAS No. 145”). SFAS No. 145 requires gains and losses on extinguishments of debt to be classified as income or loss from continuing operations, rather than as extraordinary items, as previously required under SFAS Opinion No. 4 “Reporting Gains and Losses from Extinguishment of Debt, an amendment of APB Opinion No. 30”. Extraordinary treatment will be required for certain extinguishments, as provided in APB Opinion No. 30 “Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,

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CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unusual and Infrequently Occurring Events and Transactions”. The statement also amended SFAS No. 13 “Accounting for Leases” for certain sale-leaseback transactions and sublease accounting. SFAS No. 145 is effective since January 1, 2003. The adoption of SFAS No. 145 did not have a material effect on the Company’s financial position or results of operations.

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 requires the recognition of a liability for certain guarantee obligations issued or modified after December 31, 2002. FIN 45 also clarifies disclosure requirements to be made by a guarantor for certain guarantees. The disclosure provisions of FIN 45 are effective for interim periods and fiscal years ending after December 15, 2002. The adoption of FIN 45 did not have a material effect on the Company’s financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS No. 148”). SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for companies that voluntarily change to a fair value-based method of accounting for share-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123. The provisions of SFAS No. 148 are effective for fiscal years ending after December 15, 2002. The Company has elected to continue to account for share-based compensation under the provisions of APB No. 25 and has followed the disclosure requirements under SFAS No. 148.

In June 2003, the FASB issued SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (“SFAS No. 149”). SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities”. It is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. All provisions of SFAS No. 149 should be applied prospectively. The adoption of SFAS No. 149 did not have a material effect on the Company’s financial position or results of operations.

In June 2003, the FASB issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS No. 150”). SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or as an asset in some circumstances). It is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of SFAS No. 150 and still existing at the beginning of the interim period of adoption. Restatement is not permitted. The adoption of SFAS No. 150 did not have a material effect on the Company’s financial position or results of operations.

y. Certain risks and concentration

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, accounts receivable, due from related parties and prepayments and other current assets. As of September 30, 2002 and 2003, substantially all of the Company’s cash was held in major financial institutions located in the PRC and in Hong Kong, which management believes are of high credit quality. Accounts receivable are typically unsecured and denominated in RMB, and are derived from revenues earned from operations arising in the PRC.

F-46

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

No individual customer accounted for more than 10% of net revenues during the nine-month periods ended September 30, 2002 and 2003. No individual customer accounted for more than 10% of accounts receivable as of September 30, 2002 and 2003.

3. PREPAYMENTS AND OTHER CURRENT ASSETS

Components of prepayments and other current assets as of September 30 are as follows:


	2002
	(unaudited)		2003

	RMB		RMB
Prepayments for hotel, air-ticketing reservation and packaged tour business		338,377		3,257,118
Prepayments on professional fees for initial public offerings		—		2,397,804
Employee advances		183,056		103,005
Inventory for resale		587,887		139,941
Rental and other deposits		1,343,651		867,906
Other prepayments		500,891		914,135
Others		394,577		431,082

Total		3,348,439		8,110,991

4. INVESTMENTS IN JOINT VENTURE COMPANIES

In 2002, Home Inns Hong Kong, an investment holding company, together with a Chinese joint venture partner, established joint venture companies engaged in hotel investment and management and franchise operations in the PRC. Certain details of the joint venture companies as of September 30, 2002 are as follows:


		Percentage of
		equity interest
	Place and date of	attributable to the
Name	incorporation	Group		Principal activities

Home Inns & Hotels Management (Beijing) Limited (“Home Inns Beijing”)	The PRC June 28, 2002		55% (indirectly)	Hotel management, investment and franchise
Home Inns & Hotels Management (Shanghai) Limited	The PRC November 29, 2002		55% (indirectly)	Hotel management, investment and franchise

The operations of the joint venture companies have not been included in the consolidated financial statements as the Group does not exercise effective control of these companies due to certain substantive participating rights held by the minority shareholders.

F-47

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Combined financial information of the joint venture companies, attributable to the Company as of and for the nine-month periods ended September 30 is as follows:


	2002			2003*
	(unaudited)			(unaudited)

	RMB			RMB
Balance sheet:
Current assets		12,496,267			—
Less: current liabilities		(5,270,673	)		—
Non-current assets		2,436,579			—

Net assets		9,662,173			—

Statement of operations:
Revenues		1,211,224			21,138,389	*
Net profit (loss)		(341,693	)		715,479	*

* Comprised result of operations of the joint venture companies up to August 27, 2003.

On August 27, 2003, all equity interest in Home Inns Hong Kong and its interest in the joint venture companies was distributed to the then existing holders of Series A and Series B Convertible Preferred Shares and ordinary shares as share dividends on a pro rata as-converted basis.

In the statements of operations and comprehensive income, other expenses incurred for joint venture companies mainly consist payroll compensation and other expenses incurred by the Company in relation to the development of hotel management, investment and franchise operations prior to the establishment of Home Inns Beijing.

5. PROPERTY, EQUIPMENT AND SOFTWARE

Property, equipment and software and its related accumulated depreciation and amortization as of September 30 are as follows:


	2002
	(unaudited)			2003

	RMB			RMB
Building		—			7,189,803
Leasehold improvements		1,894,247			3,786,031
Website-related equipment		3,198,193			4,883,843
Computer equipment		7,672,375			10,880,620
Furniture and fixtures		2,325,638			4,749,983
Software		471,363			471,363
Less: accumulated depreciation and amortization		(4,141,627	)		(8,995,801	)

Net book value		11,420,189			22,965,842

6. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets are primarily attributable to the purchase of Beijing Modern Express Business Travel Services Co., Ltd. and other acquisitions.

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CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Gross carrying amount, accumulated amortization and net book value of the goodwill and other intangible assets as of September 30 are as follows:


		2002
		(unaudited)			2003

		RMB			RMB
Goodwill			10,466,449			10,466,449
Less: accumulated amortization			(950,600	)		(950,600	)

Net book value			9,515,849			9,515,849

Other intangible assets —
	Customer list		1,766,206			1,766,206
	Travel supplier agreement		800,000			800,000

			2,566,206			2,566,206

Less: accumulated amortization —
	Customer list		(691,764	)		(1,045,005	)
	Travel supplier agreement		(800,000	)		(800,000	)

			(1,491,764	)		(1,845,005	)

Net book value			1,074,442			721,201

The annual estimated amortization expense for the acquired other intangible assets for the next five years is as follows:


	Amortization

	RMB
2003		353,241
2004		353,241
2005		14,719
2006		—
2007		—

		721,201

7. TAXATION

Cayman Islands

Hong Kong

The Company’s subsidiaries did not have assessable profits that were earned in or derived from Hong Kong during the nine-month periods ended September 30, 2002 and 2003. Therefore, no Hong Kong profit tax has been provided for.

F-49

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

China

The Company’s subsidiaries, its VIEs and joint venture companies registered in the PRC are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with relevant income tax laws. In accordance with “Income Tax Law of China for Enterprises with Foreign Investment and Foreign Enterprises”, the applicable EIT rates are 30% plus a local income tax of 3% except for Ctrip Travel Information where the applicable EIT rate is 15% as it is registered in Pudong New District, Shanghai.

In September 2003, Ctrip Computer Technology has received approval from relevant government authorities to be classified as a “High New Technology Development Enterprise”. This classification may entitle Ctrip Computer Technology to enjoy a preferential EIT rate of 15% for which Ctrip Computer Technology has applied. However, as of the date of the issuance of these financial statements, there is no assurance that such preferential tax rate will be granted to Ctrip Computer Technology.

Composition of income tax expense

The current and deferred portion of income tax expense included in the consolidated statements of operations and comprehensive income for the nine-month periods ended September 30 are as follows:


	2002
	(unaudited)			2003

	RMB			RMB
Current income tax		—			(11,057,303	)
Recognition (utilization) of deferred tax assets		(6,155,572	)		91,012

Income tax expense		(6,155,572	)		(10,966,291	)

Reconciliation of the differences between statutory tax rate and the effective tax rate

A reconciliation between the statutory EIT rate and the Group’s effective tax rate for nine-month periods ended September 30 are as follows:


	2002
	(unaudited)		2003

Statutory EIT rate		33%		33%
Non-deductible expenses incurred outside the PRC		9%		2%
Tax differential from statutory rate applicable to a subsidiary in the PRC		—		(7%	)

Effective EIT rate		42%		28%

Significant components of deferred tax assets


	September 30,
	2002		September 30,
	(unaudited)		2003

	RMB		RMB
Tax loss carryforwards		3,180,921		—
Temporary differences		501,486		684,155
Less: valuation allowance		—		—

Deferred tax assets		3,682,407		684,155

F-50

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company has not recorded a valuation allowance related to deferred tax assets. During the nine-month period ended September 30, 2002, the Company had operating loss and credit carryforwards for income tax purposes aggregating RMB9,639,155, which will expire in 2004 through 2005. The tax loss carryforwards were fully utilized during the year ended December 31, 2002.

8. SERIES A CONVERTIBLE PREFERRED SHARES

In March 2000, the Company entered into a Series A Preferred Share Subscription Agreement, whereby the Company authorized and issued 432,000 shares of the Company’s Series A Convertible Preferred Shares (“Series A Preferred Shares”) at an issue price of $10.4167 per share. On June 6, 2000, the Company increased the number of Series A Preferred Shares from 432,000 shares to 4,320,000 shares by decreasing the par value from US$0.10 each to US$0.01 each. The authorized and issued Series A Preferred Shares was increased to 4,320,000 shares accordingly.

The holders of Series A Preferred Shares had various rights and preferences as follows:

Voting

Dividends

The holders of the Series A Preferred Shares shall be entitled to receive out of any funds legally available therefore, when and if declared by the Board of Directors of the Company, dividends at the rate or in the amounts as the Board of Directors of the Company considers appropriate on an as-converted basis. No dividends or distribution shall be payable except out of the profits of the Company, realized or unrealized, or out of the additional paid-in capital account or as otherwise permitted.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, after setting aside or paying in full the Series C and Series B Convertible Preferred Shares liquidation preference, the holders of the Series A Preferred Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the ordinary shares or any other class or series of shares by reason of their ownership of such shares plus declared but unpaid dividends. If the remaining proceeds thus distributed among the holders of the Series A Preferred Share be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire remaining proceeds legally available for distribution shall be distributed ratably among the holders of the Series A Preferred Share in proportion to the full preferential amount that each such holder is otherwise entitled to receive.

Conversion

Each Series A Preferred Share shall automatically be converted into ordinary shares at the then effective conversion price, respectively, upon the closing of an underwritten public offering of the ordinary shares of the Company in the United States with the gross proceeds in excess of US$25,000,000, or in a similar public offering of the ordinary shares of the Company in a jurisdiction and on a recognized securities exchange outside of the United States, provided that such public offering is reasonably equivalent to the aforementioned public offering in the United States in terms of price, offering proceeds and regulatory approval. Otherwise, a holder of Series A Preferred Shares may opt to convert all but not part at any time

F-51

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

after issuance date into such number of fully paid and non-assessable ordinary shares at an initial conversion price of US$1.04167 (each Series A Convertible Preferred Share is convertible into one ordinary share). In the event that the Company shall issue additional options, warrants, convertible securities and ordinary shares without consideration or for a consideration per share less than the applicable conversion price in effect, then the conversion price shall be reduced, concurrently with such issue, to a new price in accordance with a formula determined by old price, the total price with such issue and the number of outstanding ordinary shares immediately before and after such issue.

No beneficial conversion feature charge was recognized for the issuance of Series A Preferred Shares as the estimated fair value of the ordinary shares is less than the conversion price on the date of issuance.

9. SERIES B CONVERTIBLE PREFERRED SHARES

The holders of Series B Preferred Shares had various rights and preferences as follows:

Voting

Each holder of Series B Preferred Shares had voting rights equal to the number of ordinary shares then issuable upon its conversion into ordinary shares. However, subsequent to the adjustment of the Series B Preferred Shares conversion price as of December 31, 2001, each holder of Series B Preferred Shares shall be entitled to one and a half (1.5) times the number of votes equal to the number of ordinary shares. Each holder of Series B Preferred Shares generally voted together with holders of the ordinary shares.

Dividends

The holders of the Series B Preferred Shares shall be entitled to receive out of any funds legally available therefore, when and if declared by the Board of Directors of the Company, dividends at the rate or in the amounts as the Board of Directors of the Company considers appropriate on an as-converted basis. No dividends or distribution shall be payable except out of the profits of the Company, realized or unrealized, or out of the additional paid-in capital account or as otherwise permitted.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, after setting aside or paying in full the Series C Convertible Preferred Shares liquidation preference, the holders of the Series B Preferred Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the ordinary shares or any other class or series of shares by reason of their ownership of such shares plus declared but unpaid dividends. If the remaining proceeds thus distributed among the holders of the Series B Preferred Share be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire remaining proceeds legally available for distribution shall be distributed ratably among the holders of the Series B Preferred Share in proportion to the full preferential amount that each such holder is otherwise entitled to receive.

Conversion

Each Series B Preferred Share shall automatically be converted into ordinary shares at the then effective conversion price, respectively, upon the closing of an underwritten public offering of the ordinary

F-52

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

shares of the Company in the United States with the gross proceeds in excess of US$25,000,000, or in a similar public offering of the ordinary shares of the Company in a jurisdiction and on a recognized securities exchange outside of the United States, provided that such public offering is reasonably equivalent to the aforementioned public offering in the United States in terms of price, offering proceeds and regulatory approval. Otherwise, a holder of Series B Preferred Shares may opt to convert all but not part at any time after issuance date into such number of fully paid and non-assessable ordinary shares at an initial conversion price of US$1.04445 (each Series B Convertible Preferred Share is convertible into 1.5 ordinary shares). In the event that the Company shall issue additional options, warrants, convertible securities and ordinary shares without consideration or for a consideration per share less than the applicable conversion price in effect, then the conversion price shall be reduced, concurrently with such issue, to a new price in accordance with a formula determined by old price, the total price with such issue and the number of outstanding ordinary shares immediately before and after such issue.

No beneficial conversion feature charge was recognized for the issuance of Series B Preferred Shares as the estimated fair value of the ordinary shares is less than the conversion price on the date of issuance.

Redemption

Prior to the issuance of Series C Convertible Preferred Shares, each Series B Preferred Share shall be redeemable at the option of the holders of a majority of the then outstanding shares of Series B Preferred Shares at any time commencing five calendar years after the Series B Preferred Shares issue date, out of funds legally available, therefore including capital, at a redemption price equal to US$3.13334 per share plus all declared but unpaid dividends.

Upon the issuance of Series C Convertible Preferred Shares, holders of Series B Preferred Shares agreed to forfeit its redemption rights for no consideration.

The following pro forma information presents earnings information as if the redemption feature had been forfeited as of January 1, 2003, resulting in an adjustment to accretion charges for the nine-month period ended September 30, 2003 as follows:


		For the
		nine-month
		period ended
		September 30,
		2003
		(unaudited)

		RMB
Net loss attributable to ordinary shareholders, as reported			(21,338,448	)
Add: Accretion for Series B Preferred Shares			12,365,534

Net loss attributable to ordinary shareholders, pro forma			(8,972,914	)

Basic and diluted weighted average ordinary shares outstanding
	— As reported		9,439,526

	— Pro forma		9,439,526

Basic and diluted loss per share
	— As reported		(2.26	)

	— Pro forma		(0.95	)

F-53

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10. SERIES C CONVERTIBLE PREFERRED SHARES

In September 2003, the Company entered into a Series C Preferred Shares Subscription Agreement, whereby the Company authorized and issued 2,180,755 shares of the Company’s Series C Convertible Preferred Shares (“Series C Preferred Shares”) at an issue price of US$4.5856 per share.

The holders of Series C Preferred Shares had various rights and preferences as follows:

Voting

Each holder of Series C Preferred Shares had voting rights equal to the number of ordinary shares then issuable upon its conversion into ordinary shares. Each holder of Series C Preferred Shares generally voted together with holders of the ordinary shares.

Dividends

The holders of the Series C Preferred Shares shall be entitled to receive out of any funds legally available therefore, when and if declared by the Board of Directors of the Company, dividends at the rate or in the amounts as the Board of Directors of the Company considers appropriate on an as-converted basis; provided, however, that, for the 2003 fiscal year, each share of the Series C Preferred Share shall be entitled to, when and if declared by the Board of Directors of the Company, only a pro rata share of dividends calculated by multiplying (a) the amount of dividends payable on each share of ordinary shares by (b) a fraction the numerator of which shall be the total number of days in such fiscal year such share of Series C Preferred Share has been held by its holder and the denominator of which shall be 365.

No dividends or distribution shall be payable except out of the profits of the Company, realized or unrealized, or out of the additional paid-in capital account or as otherwise permitted.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of the Series C Preferred Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the Series B Preferred Share, the Series A Preferred Share and the ordinary shares or any other class or series of shares by reason of their ownership of such shares, the amount equal to US$4.5856 for each share held and, plus declared but unpaid dividends. If the remaining proceeds thus distributed among the holders of the Series C Preferred Share be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire remaining proceeds legally available for distribution shall be distributed ratably among the holders of the Series B Preferred Share in proportion to the full preferential amount that each such holder is otherwise entitled to receive.

Conversion

Each Series C Preferred Share shall automatically be converted into ordinary shares at the then effective conversion price, respectively, upon the closing of an underwritten public offering of the ordinary shares of the Company in the United States with the gross proceeds in excess of US$25,000,000, or in a similar public offering of the ordinary shares of the Company in a jurisdiction and on a recognized securities exchange outside of the United States, provided that such public offering is reasonably equivalent to the aforementioned public offering in the United States in terms of price, offering proceeds and regulatory approval. Otherwise, a holder of Series C Preferred Shares may opt to convert all but not part at any time after issuance date into such number of fully paid and non-assessable ordinary shares at an initial conversion price of US$4.5856 (each Series C Convertible Preferred Share is convertible into one ordinary share). In the event that the Company shall issue additional options, warrants, convertible securities and ordinary shares

F-54

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

without consideration or for a consideration per share less than the applicable conversion price in effect, then the conversion price shall be reduced, concurrently with such issue, to a new price in accordance with a formula determined by old price, the total price with such issue and the number of outstanding ordinary shares immediately before and after such issue.

No beneficial conversion feature charge was recognized for the issuance of Series C Preferred Shares as the estimated fair value of the ordinary shares is less than the conversion price on the date of issuance.

In September 2003, immediately after the issuance of Series C Convertible Preferred Shares, the net proceeds received from investors were fully utilized to repurchase 842,938, 382,482 and 636,891 shares of Company’s ordinary shares, Series A and B Preferred Shares at US$4.5282, US$4.5282 and US$6.7924, respectively, on a pro-rata as-converted basis. The repurchase price per share for each class of shares was determined based on the issuance price of Series C Preferred Shares adjusted for the legal and professional fees and conversion features, where applicable. The purchased shares were retired upon repurchase. The amount not yet paid to the shareholders as related to the repurchase was RMB4,843,800 as of September 30, 2003. Such outstanding balances were fully paid in October 2003.

As the purchase price of the Series A and Series B Preferred Shares were higher than the carrying value on the date of the repurchase, the excess of the purchase price over the carrying value were recognized as deemed dividends to the holders of Preferred Shares upon repurchase. The amount of deemed dividend was RMB11,223,324 and RMB24,112,826 for Series A and Series B Preferred Shares, respectively.

11. SHARE OPTION PLAN

On April 15, 2000, the Company adopted a share option plan that provides for the issuance of up to 144,000 ordinary shares in effect for a term of 10 years unless sooner terminated by shareholders and Board of Directors. Under the share option plan, the directors may, at their discretion, grant any senior executives (including directors) and employees of the Company and/or its subsidiaries to take up share options to subscribe for shares. These share options are vested over a period of 3 years and can be exercised within 5 years from the date of grant. On June 6, 2000, the Company increased the number of ordinary shares from 2,000,000 shares to 20,000,000 shares by decreasing the par value from US$0.10 each to US$0.01 each. The total number of ordinary shares reserved for the share option plan increased from 144,000 to 1,440,000 accordingly. On July 1, 2001, the total number of ordinary shares reserved for the share option plan was increased to 1,728,000 shares. All share options granted under this plan have an exercise price of US$0.7716. Up to the date of the issuance of these financial statements, 1,535,760 options were granted under this share option plan.

The following table summarizes the Company’s share option activity as of and for the nine-month periods ended September 30:


		2002
		(unaudited)			2003

Outstanding at beginning of period			1,330,100			1,448,720
	Granted		253,440			113,200
	Exercised		—			—
	Forfeited		(119,900	)		(26,160	)

Outstanding at end of period			1,463,640			1,535,760

Vested and exercisable at end of period			696,599			1,173,411

On April 15, 2003, the Company adopted a new share option plan which provides for the issuance of up to 1,187,510 ordinary shares (“2003 Option Plan”). Under the share option plan, the directors may, at

F-55

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

their discretion, grant any senior executives (including directors) and employees of the Company and/or its subsidiaries to take up share options to subscribe for shares. These share options are vested over a period of 3 years and can be exercised within 5 years from the date of grant. As of September 30, 2003, 711,660 options were granted with an exercise price of US$2.11 under this new share option plan.

The following table summarizes the Company’s share option activity as of and for the nine-month periods ended September 30:


		2003

Outstanding at beginning of period			—
	Granted		711,660
	Exercised		—
	Forfeited		—

Outstanding at end of period			711,660

Vested and exercisable at end of period			—

In connection with the share options granted during the nine-month periods ended September 30, 2002 and 2003, the Company recognized deferred share-based compensation amounted to RMB1,216,953 and RMB3,454,731, respectively, which is being amortized over the vesting period of three years. Share-based compensation expense recognized during the nine-month periods ended September 30, 2002 and 2003, amounted to RMB336,127 and RMB1,030,843, respectively.

The Company calculated the estimated fair value of share options on the date of grant using the Black-Scholes pricing method with the following assumptions:


	For the
	nine-month		For the
	period ended		nine-month
	September 30,		period ended
	2002		September 30,
	(unaudited)		2003

Risk-free interest rate		2.65%		2.65%
Expected life (years)		5		5
Expected dividend yield		0		0
Volatility		0		0
Fair value of options at grant date		US$0.8628		US$0.6701
		US$1.1311		US$1.3396

If compensation cost for the Company’s share-based compensation plan been determined based on the estimated fair value at the grant dates for the share option awards as prescribed by SFAS No. 123, the Company’s net loss attributable to ordinary shareholders during the nine-month periods ended September 30, 2002 and 2003 will be RMB3,732,140 and RMB21,674,070, respectively.

Subsequent to September 30, 2003, the Company granted 273,980 options under the 2003 Option Plan to certain directors, senior executives and employees, with varying exercise prices of US$5.00, US$6.00, and 80% of the midpoint of the filing range for the Company’s anticipated initial public offering. Compensation expense will be recognized over the three-year vesting period based on the difference between the fair value of the ordinary shares and the exercise price of the options granted. The Company does not believe that future compensation expense related to these options will have a material impact on its consolidated financial statements.

F-56

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12. EMPLOYEE BENEFITS

The full-time employees of Ctrip Computer Technology, Ctrip Travel Information and the VIEs, which were established in the PRC, are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits. Ctrip Computer Technology, Ctrip Travel Information are required to accrue for these benefits based on certain percentages of the employees’ salaries in accordance with the relevant regulations and make contributions to the state-sponsored pension and medical plans out of the amounts accrued for medical and pension benefits. The total provision accrued for such employee benefits amounted to RMB2,133,882 and RMB3,134,498 for the nine-month periods ended September 30, 2002 and 2003, respectively. The Chinese government is responsible for the medical benefits and ultimate pension liability to these employees.

13. RELATED PARTY TRANSACTIONS

Prior to the adoption of FIN 46, certain VIEs were considered related parties as these VIEs were owned by directors and senior executives of the Company. Upon adoption of FIN 46, these entities are included in the consolidated financial statements of the Company.

During the nine-month periods ended September 30, significant related party transactions are as follows:


	2002
	(unaudited)		2003

	RMB		RMB
Consulting service fees from Beijing Chenhao		548,673		1,358,612
Consulting service fees from Shanghai Huacheng		175,746		140,000
Consulting service fees from Shanghai Ctrip Commerce		331,925		678,502
Commission income from joint venture companies		57,900		426,384
Rental expense to a related party		—		208,333

As of September 30, balances with related parties are as follows:


			2002
			(unaudited)		2003

			RMB		RMB
Due from related parties:
	Due from VIEs
		— Shanghai Huacheng		519,690		—
		— Beijing Chenhao		1,958,885		—

				2,478,575		—
	Due from joint ventures companies controlled by Home Inns Hong Kong			3,434,187		545,270

				5,912,762		545,270

	Long-term loans to related parties:
		— Director and senior executives		2,100,000		4,290,000

	Due to related parties:
	Due to VIEs
		— Shanghai Ctrip Commerce		1,511,946		—

F-57

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The amounts due from and due to related parties as of September 30, 2002 and 2003, mainly arose from the transactions disclosed above and revenue received and expenses paid on behalf on each other. They are unsecured, interest-free and have no fixed repayment terms.

The long-term loans to related parties as of September 30, 2003 represented loans granted to a senior executive to acquire 66% of equity interests of Shanghai Cuiming International Travel Agency Co., Ltd. (“Shanghai Cuiming”), a company incorporated in Shanghai, the PRC, at a consideration of RMB1,980,000 and the subsequent additional investment of RMB2,310,000. Shanghai Cuiming holds a travel agency license for both cross border and domestic package-tour business. After the Company’s additional investment, its maximum exposure to loss as related to Shanghai Cuiming will be RMB4,290,000. The Company is in the process of entering into various agreements with Shanghai Cuiming. Upon execution of those agreements, Shanghai Cuiming will be a consolidated VIE of the Company. However, these transactions have not yet been completed as of the date of the issuance of these financial statements.

14. OTHER PAYABLES AND ACCRUALS

Components of other payables and accruals as of September 30 are as follows:


	2002
	(unaudited)		2003

	RMB		RMB
Payable to holders of Series A and B Preferred Shares and ordinary shares for repurchase		—		4,843,800
Deposits received from suppliers		439,046		493,831
Accrued expenses		934,890		1,058,529
Accrued professional fee		—		745,200
Others		106,456		397,241

Total		1,480,392		7,538,601

Amounts payable to holders of Series A and Series B Preferred Shares and ordinary shares were subsequently paid in October 2003.

F-58

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

15. LOSS PER SHARE

Basic loss per share and diluted loss per share have been calculated in accordance with SFAS No. 128 for the nine-month periods ended September 30 as follows:


	2002
	(unaudited)			2003

	RMB			RMB
Numerator:
Net loss attributable to ordinary shareholders		(3,684,042	)		(21,338,448	)

Effect of dilutive securities		—			—

Numerator for diluted loss per share		(3,684,042	)		(21,338,448	)

Denominator:
Denominator for basic loss per share — weighted-average ordinary shares outstanding		9,520,698			9,439,526

Effect of dilutive securities		—			—

Denominator for diluted loss per share		9,520,698			9,439,526

Basic and diluted loss per share		(0.39	)		(2.26	)

During the nine-month period ended September 30, 2002, potentially dilutive securities that were not included in the computation of diluted loss per share because of their anti-dilutive effect were the Series A and B Preferred Shares and share options granted to employees.

During the nine-month period ended September 30, 2003, potentially dilutive securities that were not included in the computation of diluted loss per share because of its anti-dilutive effect were the Series A, Series B and Series C Preferred Shares and share options granted to employees

16. PRO FORMA FOR CONVERSION OF PREFERRED SHARES

Each Series A, Series B and Series C Convertible Preferred Share shall automatically be converted into ordinary shares at the then effective conversion price, upon the closing of an underwritten public offering of the ordinary shares of the Company in the United States with the gross proceeds to the Company in excess of US$25,000,000, or in a similar public offering of the ordinary shares of the Company in a jurisdiction and on a recognized securities exchange outside of the United States, provided that such public offering is reasonably equivalent to the aforementioned public offering in the United States in terms of price, offering proceeds and regulatory approval. The conversion price of Series A, Series B and Series C Preferred Shares is US$1.0417, US$1.044467 and US$4.5856, respectively. The pro forma balance sheet as of September 30, 2003 presents an as adjusted financial position as if the conversion of the preferred shares into ordinary shares occurred on September 30, 2003.

F-59

CTRIP.COM INTERNATIONAL, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

17. COMMITMENTS AND CONTINGENCIES

Operating lease commitments


	Office		Equipment and
	premises		others		Total

	RMB		RMB		RMB
2004		2,432,119		3,984,660		6,416,779
2005		623,704		536,985		1,160,689
2006		—		—		—
2007		—		—		—
2008		—		—		—

		3,055,823		4,521,645		7,577,468

Rental expense amounted to approximately RMB3,635,255 and RMB2,385,667 during the nine-month periods ended September 30, 2002 and 2003, respectively, and are charged to the statements of operations and comprehensive income when incurred.

Contingencies

F-60

Through and including (the 25^th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

4,200,000 American Depositary Shares

(CTRIP LOGO)

Ctrip.com International, Ltd.

Representing 8,400,000 Ordinary Shares

PROSPECTUS

Merrill Lynch & Co.

U.S. Bancorp Piper Jaffray

SoundView Technology Group

, 2003

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the various expenses incurred or to be incurred by us in connection with this offering, other than underwriting discounts and commissions.


	Amount Borne by Us

	US$
Securities and Exchange Commission registration fees		7,602
Printing and engraving expenses		180,000
Accounting fees		450,000
Legal fees		700,000
Depositary, custodian and transfer agent fees		30,000
Roadshow and other miscellaneous fees and expenses		150,000

Item 14. Indemnification of Directors and Officers

Pursuant to the form of indemnification agreements filed as Exhibit 10.2 to this registration statement, we will agree to indemnify our directors and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.

The forms of the U.S. underwriting agreement and the international purchase agreement to be filed as Exhibits 1.1 and 1.2 to this registration statement will also provide for indemnification of us and our officers and directors.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 15. Recent Sales of Unregistered Securities

During the past three years, we have issued the following securities. We believe that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation D, Regulation S or Rule 701 under the Securities Act or pursuant to Section 4(2) of the Securities Act regarding transactions not involving a public offering.


		Number of			Number of
		Securities			Ordinary Shares
Purchaser	Date of Issuance	Originally Issued			as Converted(4)		Consideration

							(US$)
Carlyle Asia Venture Partners I, L.P.	November 13, 2000		4,814,008	(1)		7,221,012		7,542,107
CIPA Co-Investment, L.P.	November 13, 2000		292,266	(1)		438,399		457,893
IDG Technology Venture Investments, L.P.	November 13, 2000		414,885	(1)		622,328		650,000
Orchid Asia II, L.P.	November 13, 2000		183,826	(1)		275,739		288,000

II-1


		Number of			Number of
		Securities			Ordinary Shares
Purchaser	Date of Issuance	Originally Issued			as Converted(4)		Consideration

							(US$)
S.I. Technology Venture Capital Limited	November 13, 2000		829,770	(1)		1,244,655		1,300,000
Softbank Asia Net-Trans (No. 4) Limited	November 13, 2000		638,285	(1)		957,428		1,000,000
Openventure Company Limited	November 13, 2000		12,765	(1)		19,148		20,000
Gabriel Li	November 13, 2000		5,745	(1)		8,618		9,000
JFI II L.P.	November 13, 2000		670	(1)		1,005		1,050
Eric X. Li	November 13, 2000		383	(1)		575		600
Jed Dempsey	November 13, 2000		670	(1)		1,005		1,050
Jim Watson	November 13, 2000		191	(1)		287		300
Fang Xi Yuan	July 1, 2001		17,614	(2)		17,614		N/A	(5)
Wang Sheng Li	July 1, 2001		616,489	(2)		616,489		N/A	(5)
Li Jing Dong	July 1, 2001		140,911	(2)		140,911		N/A	(5)
Tan Xiao	July 1, 2001		61,649	(2)		61,649		N/A	(5)
Wang Ze Sheng	July 1, 2001		26,421	(2)		26,421		N/A	(5)
Sun Yu	July 1, 2001		17,614	(2)		17,614		N/A	(5)
Tiger Technology Private Investment Partners, L.P.	September 4, 2003		2,173,122	(3)		2,173,122		9,965,000
Tiger Technology II, L.P.	September 4, 2003		7,633	(3)		7,633		35,000
Employees as a group	April 15, 2000 to January 1, 2003		1,535,760	(6)		N/A		N/A
Directors and employees as a group	April 15, 2003 to November 14, 2003		980,640	(7)		N/A		N/A


(1)	Series B preferred shares.

(2)	Ordinary shares.

(3)	Series C preferred shares.


(4)	Calculated based on the conversion ratio effective on November 24, 2003.


(5)	Shares were issued as part of our consideration for acquiring Beijing Modern Express in October 2000.

(6)	Stock options issued under our 2000 Employees’ Stock Option Plan.

(7)	Stock options issued under our 2003 Employees’ Stock Option Plan.


Item 16.	*Exhibits and Financial Statement Schedules*


	(a)	Exhibits


Exhibits		Description of Document

	1.1**	Form of U.S. Underwriting Agreement.
	1.2**	Form of International Purchase Agreement.
	3.1†	Memorandum and Articles of Association of the Registrant, as currently in effect.
	3.2*	Form of Amended and Restated Memorandum and Articles of Association of the Registrant.
	4.1*	Registrant’s specimen American Depositary Receipt.
	4.2*	Registrant’s specimen certificate for ordinary shares.

II-2


Exhibits		Description of Document

	4.3†	Deposit Agreement, dated as of , 2003, among the Registrant, The Bank of New York and holders of the American Depositary Receipts.
	4.4†	Shareholders Agreement, dated as of September 4, 2003, among the Registrant and other parties therein.
	5.1*	Form of Opinion of Latham & Watkins LLP regarding the validity of the ADSs being registered.
	5.2*	Form of Opinion of Maples and Calder Asia regarding the issue of the ordinary shares being registered.
	10.1†	Form of Ctrip.com International, Ltd. Stock Option Plan.
	10.2†	Form of Indemnification Agreement with the Registrant’s directors and executive officers.
	10.3†	Translation of Form of Labor Contract for Employees of the Registrant’s subsidiaries in China.
	10.4†	Employment Agreement, effective as of September 1, 2003 between the Registrant and James Jianzhang Liang.
	10.5†	Employment Agreement, effective as of September 1, 2003 between the Registrant and Neil Nanpeng Shen.
	10.6†	Employment Agreement, effective as of September 1, 2003 between the Registrant and Min Fan.
	10.7†	Translation of Form of Consulting Services Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.8†	Translation of Form of Loan Agreement between Ctrip.com (Hong Kong) Limited and a Shareholder of an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.9†	Translation of Form of Exclusive Option Agreement among Ctrip.com (Hong Kong) Limited, an Affiliated Chinese Entity of the Registrant and the Shareholder of the Entity, as currently in effect.
	10.10†	Translation of Form of Share Pledge Agreement among Ctrip Computer Technology (Shanghai) Co., Ltd. and a Shareholder of an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.11†	Translation of Form of Trademark License Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.12†	Translation of Form of Software License Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.13†	Translation of Form of Operating Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.14†	Translation of Lease Agreement dated May 1, 2003 between Ctrip Travel Information Technology (Shanghai) Co., Ltd. and Yu Zhong (Shanghai) Consulting Co., Ltd.
	10.15†	Translation of Form of Power of Attorney by a shareholder of an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.16†	Confidentiality and Non-Competition Agreement, effective as of September 10, 2003, between the Registrant and Qi Ji.
	10.17†	Consulting Services Agreement, dated November 2000, between Shanghai Ctrip Commerce Co., Ltd. and Ctrip Computer Technology (Shanghai) Co., Ltd. (terminated).
	10.18†	Consulting Services Agreement, effective as of July 15, 2002, between Ctrip Computer Technology (Shanghai) Co., Ltd. and Beijing Chenhao Xinye Air-Ticketing Service Co., Ltd. (terminated).
	10.19†	Travel Information Services Agreement, effective as of May 1, 2002, between Ctrip Computer Technology (Shanghai) Co., Ltd. and Shanghai Huacheng Southwest Travel Agency Co., Ltd. (terminated).
	21.1†	Subsidiaries of the Registrant.

II-3


Exhibits		Description of Document

	23.1*	Consent of PricewaterhouseCoopers, Independent Auditors.
	23.2*	Consent of Maples and Calder Asia (see Exhibit 5.2).
	23.3*	Consent of Latham & Watkins LLP (see Exhibit 5.1).
	23.4*	Consent of Commerce & Finance Law Offices (see Exhibits 99.1 through 99.7)
	24.1†	Powers of Attorney.
	99.1*	Form of Opinion of Commerce & Finance Law Offices regarding the Share Pledge Agreement.
	99.2*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Shanghai Ctrip Commerce Co., Ltd.
	99.3*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Shanghai Huacheng Southwest Travel Agency Co., Ltd.
	99.4*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Beijing Chenhao Xinye Air-Ticketing Service Co., Ltd.
	99.5*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Guangzhou Guangcheng Commercial Service Co., Ltd.
	99.6*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Shanghai Cuiming International Travel Agency Co., Ltd.
	99.7*	Form of Opinion of Commerce & Finance Law Offices regarding certain Chinese law matters.
	99.8*	Form of Opinion of Boughton Peterson Yang Anderson regarding certain Hong Kong law matters.


	*	Filed herewith.


**	To be filed by amendment


	†	Previously filed.

(b) Financial Statement Schedules

Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the Consolidated Financial Statements or the Notes thereto.

Item 17. Undertakings

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 6, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its U.S. counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:


	(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance

II-4


	upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

	(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hong Kong S.A.R., China, on November 25, 2003.


	CTRIP.COM INTERNATIONAL, LTD.


	By:	/s/ NEIL NANPENG SHEN


	Name: Neil Nanpeng Shen
	Title: President and Chief Financial Officer

II-6

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.



Signature	Title	Date


* James Jianzhang Liang	Chairman/Chief Executive Officer	November 25, 2003

/s/ NEIL NANPENG SHEN Neil Nanpeng Shen	President/Chief Financial Officer	November 25, 2003

* Xiaofan Wang	Controller	November 25, 2003

* JP Gan	Director	November 25, 2003

* Junichi Goto	Director	November 25, 2003

* Yufei Hu	Director	November 25, 2003

* Gabriel Li	Director	November 25, 2003

* Qi Ji	Director	November 25, 2003

* Robert Stein	Director	November 25, 2003

* Suyang Zhang	Director	November 25, 2003

* Name: Donald J. Puglisi Title: Managing Director, Puglisi & Associates	Authorized Representative in the United States	November 25, 2003
*By: /s/ NEIL NANPENG SHEN Neil Nanpeng Shen Attorney-in-fact

II-7

CTRIP.COM INTERNATIONAL, LTD.

EXHIBIT INDEX


Exhibits		Description of Document

	1.1**	Form of U.S. Underwriting Agreement.
	1.2**	Form of International Purchase Agreement.
	3.1†	Memorandum and Articles of Association of the Registrant, as currently in effect.
	3.2*	Form of Amended and Restated Memorandum and Articles of Association of the Registrant.
	4.1*	Registrant’s specimen American Depositary Receipt.
	4.2*	Registrant’s specimen certificate for Ordinary Shares.
	4.3†	Deposit Agreement, dated as of , 2003, among the Registrant, The Bank of New York and holders of the American Depositary Receipts.
	4.4†	Shareholders Agreement, dated as of September 4, 2003, among the Registrant and other parties therein.
	5.1*	Opinion of Latham & Watkins LLP regarding the validity of the ADSs being registered.
	5.2*	Opinion of Maples and Calder Asia regarding the issue of the ordinary shares being registered.
	10.1†	Form of Ctrip.com International, Ltd. Stock Option Plan.
	10.2†	Form of Indemnification Agreement with the Registrant’s directors and executive officers.
	10.3†	Translation of Form of Labor Contract for Employees of the Registrant’s subsidiaries in China.
	10.4†	Employment Agreement, effective as of September 1, 2003 between the Registrant and James Jianzhang Liang.
	10.5†	Employment Agreement, effective as of September 1, 2003 between the Registrant and Neil Nanpeng Shen.
	10.6†	Employment Agreement, effective as of September 1, 2003 between the Registrant and Min Fan.
	10.7†	Translation of Form of Consulting and Services Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.8†	Translation of Form of Loan Agreement between Ctrip.com (Hong Kong) Limited and a Shareholder of an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.9†	Translation of Form of Exclusive Option Agreement among Ctrip.com (Hong Kong) Limited, an Affiliated Chinese Entity of the Registrant and the Shareholder of the Entity, as currently in effect.
	10.10†	Translation of Form of Share Pledge Agreement among Ctrip Computer Technology (Shanghai) Co., Ltd. and a Shareholder of an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.11†	Translation of Form of Trademark License Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.12†	Translation of Form of Software License Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.13†	Translation of Form of Operating Agreement between Ctrip Computer Technology (Shanghai) Co., Ltd. and an Affiliated Chinese Entity of the Registrant, as currently in effect.
	10.14†	Translation of Lease Agreement dated May 1, 2003 between Ctrip Travel Information Technology (Shanghai) Co., Ltd. and Yu Zhong (Shanghai) Consulting Co., Ltd.
	10.15†	Translation of Form of Power of Attorney by a shareholder of an Affiliated Chinese Entity of the Registrant, as currently in effect.

II-8


Exhibits		Description of Document

	10.16†	Confidentiality and Non-Competition Agreement, effective as of September 10, 2003, between the Registrant and Qi Ji.
	10.17†	Consulting Services Agreement, dated November 2000, between Shanghai Ctrip Commerce Co., Ltd. and Ctrip Computer Technology (Shanghai) Co., Ltd. (terminated).
	10.18†	Consulting Services Agreement, effective as of July 15, 2002, between Ctrip Computer Technology (Shanghai) Co., Ltd. and Beijing Chenhao Xinye Air-Ticketing Service Co., Ltd. (terminated).
	10.19†	Travel Information Services Agreement, effective as of May 1, 2002, between Ctrip Computer Technology (Shanghai) Co., Ltd. and Shanghai Huacheng Southwest Travel Agency Co., Ltd. (terminated).
	21.1†	Subsidiaries of the Registrant.
	23.1*	Consent of PricewaterhouseCoopers, Independent Auditors.
	23.2*	Consent of Maples and Calder Asia (see Exhibit 5.2).
	23.3*	Consent of Latham & Watkins LLP (see Exhibit 5.1).
	23.4*	Consent of Commerce & Finance Law Offices (see Exhibits 99.1 through 99.7).
	24.1†	Powers of Attorney.
	99.1*	Form of Opinion of Commerce & Finance Law Offices regarding the Share Pledge Agreement.
	99.2*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Shanghai Ctrip Commerce Co., Ltd.
	99.3*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Shanghai Huacheng Southwest Travel Agency Co., Ltd.
	99.4*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Beijing Chenhao Xinye Air-Ticketing Service Co., Ltd.
	99.5*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Guangzhou Guangcheng Commercial Service Co., Ltd.
	99.6*	Form of Opinion of Commerce & Finance Law Offices regarding the contractual arrangements between the Registrant and Shanghai Cuiming International Travel Agency Co., Ltd.
	99.7*	Form of Opinion of Commerce & Finance Law Offices regarding certain Chinese law matters.
	99.8*	Form of Opinion of Boughton Peterson Yang Anderson regarding certain Hong Kong law matters.


	*	Filed herewith.


**	To be filed by amendment.


	†	Previously filed.

II-9




                                                                     EXHIBIT 3.2

                        THE COMPANIES LAW (2003 REVISION)

                              OF THE CAYMAN ISLANDS

                            COMPANY LIMITED BY SHARES

                 AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

                                       OF

                          CTRIP.COM INTERNATIONAL, LTD.

                     ADOPTED BY SPECIAL RESOLUTION PASSED ON

                                [________] , 2003

1.       The name of the Company is CTRIP.COM INTERNATIONAL, LTD.

2.       The Registered Office of the Company shall be at the offices of M&C
Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street,
George Town, Grand Cayman, Cayman Islands, or at such other place as the
Directors may from time to time decide.

3.       The objects for which the Company is established are unrestricted and
the Company shall have full power and authority to carry out any object not
prohibited by the Companies Law (2003 Revision) or as the same may be revised
from time to time, or any other law of the Cayman Islands.

4.       The liability of each Member is limited to the amount from time to time
unpaid on such Member's Shares.

5.       The authorised share capital of the Company is 100,000,000 ordinary
shares of a nominal or par value of US$0.01 each. The Company has power to
redeem or purchase any of its shares and to increase or reduce the said capital
subject to the provisions of the Companies Law (2003 Revision) and the Articles
of Association and to issue any part of its capital, whether original, redeemed
or increased with or without any preference, priority or special privilege or
subject to any postponement of rights or to any conditions or restrictions and
so that unless the conditions of issue shall otherwise expressly declare every
issue of shares whether declared to be preference or otherwise shall be subject
to the powers hereinbefore contained.

6.       The Company has the power to register by way of continuation as a body
corporate limited by shares under the laws of any jurisdiction outside the
Cayman Islands and to be deregistered in the Cayman Islands.

7.       Capitalised terms that are not defined in this Amended and Restated
Memorandum of Association bear the same meaning as those given in the Articles
of Association of the Company.




                                                                     EXHIBIT 3.2

                        THE COMPANIES LAW (2003 REVISION)

                              OF THE CAYMAN ISLANDS

                            COMPANY LIMITED BY SHARES

                  AMENDED AND RESTATED ARTICLES OF ASSOCIATION

                                       OF

                          CTRIP.COM INTERNATIONAL, LTD.

                     ADOPTED BY SPECIAL RESOLUTION PASSED ON

                               [_________] , 2003

1.       In these Articles Table A in the Schedule to the Law does not apply
and, unless there is something in the subject or context inconsistent therewith,

         "ARTICLES" means these Articles as originally framed or as from time to
time altered by Special Resolution.

         "AUDITORS" means the persons for the time being performing the duties
of auditors of the Company (if any).

         "BOARD" means the Board of the Directors as defined in Article [80].

         "THE CHAIRMAN" shall mean the Chairman presiding at any meeting of
members or of the Board.

         "COMPANY" means Ctrip.com International, Ltd.

         "DEBENTURE" means debenture stock, mortgages, bonds and any other such
securities of the Company whether constituting a charge on the assets of the
Company or not.

         "DIRECTORS" means the directors for the time being of the Company.

         "DIVIDEND" includes interim bonuses.

         "ELECTRONIC RECORD" has the same meaning as in the Electronic
Transactions Law (2003 Revision).

         "THE LAW" shall mean the Companies Law (2003 revision) of the Cayman
Islands and any amendments thereto or re-enactments thereof for the time being
in force and includes every other law incorporated therewith or substituted
therefore.

         "MEMBER" shall bear the same meaning as in the Law.



                                       2

                                                                     EXHIBIT 3.2

         "MEMORANDUM" means the memorandum of association of the Company as
originally framed or as from time to time altered by Special Resolution.

         "MONTH" means calendar month.

         "ORDINARY RESOLUTION" means a resolution passed by a simple majority of
the Members as, being entitled to do so, vote in person or, where proxies are
allowed, by proxy at a general meeting, and includes a unanimous written
resolution. In computing the majority when a poll is demanded regard shall be
had to the number of votes to which each Member is entitled by the Articles.

         "PAID-UP" means paid-up and/or credited as paid-up.

         "PRINCIPAL REGISTER" shall mean the register of members of the Company
maintained at such place within or outside the Cayman Islands as the Board shall
determine from time to time.

         "REGISTER OF MEMBERS" means the register maintained in accordance with
the Law and includes (except where otherwise stated) any duplicate Register of
Members.

         "REGISTERED OFFICE" means the registered office for the time being of
the Company.

         "SEAL" means the common seal of the Company and includes every
duplicate seal.

         "SECRETARY" includes an Assistant Secretary and any person appointed to
perform the duties of Secretary of the Company.

         "SHARE" and "SHARES" means a share or shares in the Company and
includes a fraction of a share.

         "SHARE PREMIUM ACCOUNT" means the account of the Company which the
Company is required by the Law to maintain, to which all premiums over nominal
or par value received by the Company in respect of issues of Shares from time to
time are credited.

         "SPECIAL RESOLUTION" has the same meaning as in the Law, and includes a
unanimous written resolution.

         "WRITTEN" and "IN WRITING" include all modes of representing or
reproducing words in visible form, including in the form of an Electronic
Record.

         Words importing the singular number include the plural number and
vice-versa.

         Words importing the masculine gender include the feminine gender.

         Words importing persons include corporations.

         References to provisions of any law or regulation shall be construed as
references to those provisions as amended, modified, re-enacted or replaced from
time to time.

         Any phrase introduced by the terms "including", "include", "in
particular" or any similar expression shall be construed as illustrative and
shall not limit the sense of the words preceding those terms.



                                       3

                                                                     EXHIBIT 3.2

         Headings are inserted for reference only and shall be ignored in
construing these Articles.

2.       The business of the Company may be commenced as soon after
incorporation as the Directors shall see fit.

3.       The Directors may pay, out of the capital or any other monies of the
Company, all expenses incurred in or about the formation and establishment of
the Company including the expenses of registration.

                                  SHARE CAPITAL

4.       The authorised share capital of the Company is 100,000,000 ordinary
shares of a nominal or par value of US$0.01 each.

                                 ISSUE OF SHARES

5.       Subject to the relevant provisions, if any, in the Memorandum and to
any direction that may be given by the Company in general meeting and without
prejudice to any special rights previously conferred on the holders of existing
Shares, the Directors may allot, issue, grant options over or otherwise dispose
of Shares of the Company (including fractions of a Share) with or without
preferred, deferred or other special rights or restrictions, whether with regard
to dividend, voting, return of capital or otherwise and to such persons, at such
times and on such other terms as they think proper. The Company shall not issue
Shares in bearer form.

                   REGISTER OF MEMBERS AND SHARE CERTIFICATES

6.       The Company shall maintain a register of its Members and every person
whose name is entered as a Member in the register of Members shall be entitled
without payment to receive within two months after allotment or lodgement of
transfer (or within such other period as the conditions of issue shall provide)
one certificate for all his Shares or several certificates each for one or more
of his Shares upon payment of fifty cents (US$0.50) for every certificate after
the first or such less sum as the Directors shall from time to time determine
provided that in respect of a Share or Shares held jointly by several persons
the Company shall not be bound to issue more than one certificate and delivery
of a certificate for a Share to one of the several joint holders shall be
sufficient delivery to all such holders.

7.       The Board shall cause to be kept at such place within or outside the
Cayman Islands as they deem fit a principal register of the Members and there
shall be entered therein the particulars of the Members and the Shares issued to
each of them and other particulars required under the Law of the Cayman Islands.

8.       If the Board considers it necessary or appropriate, the Company may
establish and maintain a branch register or registers of Members at such
location or locations within or



                                       4

                                                                     EXHIBIT 3.2

outside the Cayman Islands as the Board thinks fit. The principal register and
the branch register(s) shall together be treated as the register for the
purposes of these Articles.

9.       The Board may, in its absolute discretion, at any time transfer any
Share upon the principal register to any branch register or any Share on any
branch register to the principal register or any other branch register.

10.      The Company shall as soon as practicable and on a regular basis record
in the principal register all transfers of Shares effected on any branch
register and shall at all times maintain the principal register in such manner
to show at all times the Members for the time being and the Shares respectively
held by them, in all respects in accordance with the Law.

11.      The register may be closed at such times and for such periods as the
Board may from time to time determine, either generally or in respect of any
class of Shares, provided that the register shall not be closed for more than 30
days in any year (or such longer period as the members may by ordinary
resolution determine provided that such period shall not be extended beyond 60
days in any year).

12.      Every certificate for Shares or debentures or representing any other
form of security of the Company shall be issued under the seal of the Company,
which shall only be affixed with the authority of the Board.

13.      Every Share certificate shall specify the number of Shares in respect
of which it is issued and the amount paid thereon or the fact that they are
fully paid, as the case may be, and may otherwise be in such form as the Board
may from time to time prescribe.

14.      The Company shall not be bound to register more than four persons as
joint holders of any Share. If any Shares shall stand in the names of two or
more persons, the person first named in the register shall be deemed the sole
holder thereof as regards service of notices and, subject to the provisions of
these Articles, all or any other matters connected with the Company, except the
transfer of the Share.

15.      If a Share certificate is defaced, lost or destroyed, it may be
replaced on payment of such reasonable fee, if any, as the Board may from time
to time prescribe and on such terms and conditions, if any, as to publication of
notices, evidence and indemnity, as the Board thinks fit and where it is defaced
or worn out, after delivery up of the old certificate to the Company for
cancellation.

                               TRANSFER OF SHARES

16.      The instrument of transfer of any Share shall be in writing and shall
be executed by or on behalf of the transferor and the transferor shall be deemed
to remain the holder of a Share until the name of the transferee is entered in
the register in respect thereof.

17.      The Directors may in their absolute discretion decline to register any
transfer of Shares without assigning any reason therefor. If the Directors
refuse to register a transfer they shall notify the transferee within two months
of such refusal.



                                       5

                                                                     EXHIBIT 3.2

18.      The registration of transfers may be suspended at such time and for
such periods as the Directors may from time to time determine, provided always
that such registration shall not be suspended for more than forty-five days in
any year.

                                REDEEMABLE SHARES

19.      (a)      Subject to the provisions of the Law and the Memorandum,
Shares may be issued on the terms that they are, or at the option of the Company
or the holder are, to be redeemed on such terms and in such manner as the
Company, before the issue of the Shares, may by Special Resolution determine.

         (b)      Subject to the provisions of the Law and the Memorandum, the
Company may purchase its own Shares (including fractions of a Share), including
any redeemable Shares, provided that the manner of purchase has first been
authorised by the Company in a general meeting and may make payment therefor in
any manner authorised by the Law, including out of capital.

                          VARIATION OF RIGHTS OF SHARES

20.      If at any time the Share capital of the Company is divided into
different classes of Shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the Shares of that class) may, whether or not
the Company is being wound-up and except where these Articles or the Law impose
any stricter quorum, voting or procedural requirements in regard to the
variation of rights attached to a specific class, be varied with the consent in
writing of the holders of 75% of the issued Shares of that class, or with the
sanction of a Special Resolution passed at a general meeting of the holders of
the Shares of that class.

21.      The provisions of these Articles relating to general meetings shall
apply to every such general meeting of the holders of one class of Shares except
that the necessary quorum shall be one person holding or representing by proxy
at least one-third of the issued Shares of the class and that any holder of
Shares of the class present in person or by proxy may demand a poll.

22.      For purposes of this provision any particular issue of Shares not
carrying the same rights (whether as to rate of dividend, redemption or
otherwise) as any other Shares of the time being in issue, shall be deemed to
constitute a separate class of Shares. The rights conferred upon the holders of
the shares of any class issued with preferred or other rights shall not, unless
otherwise expressly provided by the terms of issue of the shares of that class,
be deemed to be varied by the creation or issue of further shares ranking pari
passu therewith.

                          COMMISSION ON SALE OF SHARES

23.      The Company may in so far as the Law from time to time permits pay a
commission to any person in consideration of his subscribing or agreeing to
subscribe whether absolutely or conditionally for any Shares of the Company.
Such commissions may be satisfied by the payment of cash or the lodgement of
fully or partly paid-up Shares or partly in one way and



                                       6

                                                                     EXHIBIT 3.2

partly in the other. The Company may also on any issue of Shares pay such
brokerage as may be lawful.

                             NOTICES OF RECORD DATE

24.      In the event that the Company shall propose at any time:

         (a)      to declare any dividend or distribution upon its Shares,
whether in cash, property, Shares or other securities, whether or not a regular
cash dividend and whether or not out of earnings or earned surplus;

         (b)      to offer for subscription pro rata to the holders of any class
or series of its Shares any additional shares of Shares of any class or series
or other rights;

         (c)      to effect any reclassification or recapitalisation of its
Shares outstanding involving a change in the Shares; or

         (d)      to merge or consolidate with or into any other corporation, or
sell, lease or convey all or substantially all its property or business, or to
liquidate, dissolve or wind up:

                  (i)      at least 20 days' prior written notice of the date on
which a record shall be taken for such dividend, distribution or subscription
rights (and specifying the date on which the holders of Shares shall be entitled
thereto) or for determining rights to vote in respect of the matters referred to
in (c) and (d) above; and

                  (ii)     in the case of the matters referred to in (c) and (d)
above, at least 20 days' prior written notice of the date when the same shall
take place (and specifying the date on which the holders of Shares shall be
entitled to exchange their Shares for securities or other property deliverable
upon the occurrence of such event).

                            NON-RECOGNITION OF TRUSTS

25.      The Company shall not be bound by or compelled to recognise in any way
(even when notified) any equitable, contingent, future, or partial interest in
any Share, or (except only as is otherwise provided by these Articles or the
Law) any other rights in respect of any Share other than an absolute right to
the entirety thereof in the registered holder.

                                 LIEN ON SHARES

26.      The Company shall have a first and paramount lien on all Shares
(whether fully paid-up or not) registered in the name of a Member (whether
solely or jointly with others) for all debts, liabilities or engagements to or
with the Company (whether presently payable or not) by such Member or his
estate, either alone or jointly with any other person, whether a Member or not,
but the Directors may at any time declare any Share to be wholly or in part
exempt from the provisions of this Article. The registration of a transfer of
any such Share shall operate as a waiver of the Company's lien thereon. The
Company's lien on a Share shall also extend to any amount payable in respect of
that Share.



                                       7

                                                                     EXHIBIT 3.2

27.      The Company may sell, in such manner as the Directors think fit, any
Shares on which the Company has a lien, if a sum in respect of which the lien
exists is presently payable, and is not paid within fourteen days after notice
has been given to the holder of the Shares or to the person entitled to it in
consequence of the death or bankruptcy of the holder, demanding payment and
stating that if the notice is not complied with the Shares may be sold.

28.      To give effect to any such sale, the Directors may authorise any person
to execute an instrument of transfer of the Shares sold to, or in accordance
with the directions of, the purchaser. The purchaser or his nominee shall be
registered as the holder of the Shares comprised in any such transfer, and he
shall not be bound to see to the application of the purchase money, nor shall
his title to the Shares be affected by any irregularity or invalidity in the
sale or the exercise of the Company's power of sale under these Articles.

29.      The net proceeds of such sale after payment of such costs, shall be
applied in payment of such part of the amount in respect of which the lien
exists as is presently payable and any residue, shall (subject to a like lien
for sums not presently payable as existed upon the Shares before the sale) be
paid to the person entitled to the Shares at the date of the sale.

                                 CALL ON SHARES

30.      (a)      The Directors may from time to time make calls upon the
Members in respect of any monies unpaid on their Shares (whether on account of
the nominal value of the Shares or by way of premium or otherwise) and not by
the conditions of allotment thereof made payable at fixed terms, provided that
no call shall be payable at less than one month from the date fixed for the
payment of the last preceding call, and each Member shall (subject to receiving
at least fourteen days notice specifying the time or times of payment) pay to
the Company at the time or times so specified the amount called on the Shares. A
call may be revoked or postponed as the Directors may determine. A call may be
made payable by instalments.

         (b)      A call shall be deemed to have been made at the time when the
resolution of the Directors authorising such call was passed.

         (c)      The joint holders of a Share shall be jointly and severally
liable to pay all calls in respect thereof.

31.      If a sum called in respect of a Share is not paid before or on a day
appointed for payment thereof, the persons from whom the sum is due shall pay
interest on the sum from the day appointed for payment thereof to the time of
actual payment at such rate not exceeding ten per cent per annum as the
Directors may determine, but the Directors shall be at liberty to waive payment
of such interest either wholly or in part.

32.      Any sum which by the terms of issue of a Share becomes payable on
allotment or at any fixed date, whether on account of the nominal value of the
Share or by way of premium or otherwise, shall for the purposes of these
Articles be deemed to be a call duly made, notified and payable on the date on
which by the terms of issue the same becomes payable, and in the case of
non-payment all the relevant provisions of these Articles as to payment of



                                       8

                                                                     EXHIBIT 3.2

interest forfeiture or otherwise shall apply as if such sum had become payable
by virtue of a call duly made and notified.

33.      The Directors may, on the issue of Shares, differentiate between the
holders as to the amount of calls or interest to be paid and the times of
payment.

34.      (a)      The Directors may, if they think fit, receive from any Member
willing to advance the same, all or any part of the monies uncalled and unpaid
upon any Shares held by him, and upon all or any of the monies so advanced may
(until the same would but for such advances, become payable) pay interest at
such rate not exceeding (unless the Company in general meeting shall otherwise
direct) seven per cent per annum, as may be agreed upon between the Directors
and the Member paying such sum in advance.

         (b) No such sum paid in advance of calls shall entitle the Member
paying such sum to any portion of a dividend declared in respect of any period
prior to the date upon which such sum would, but for such payment, become
presently payable.

                              FORFEITURE OF SHARES

35.      (a)      If a Member fails to pay any call or instalment of a call or
to make any payment required by the terms of issue on the day appointed for
payment thereof, the Directors may, at any time thereafter during such time as
any part of the call, instalment or payment remains unpaid, give notice
requiring payment of any part of the call, instalment or payment that is unpaid,
together with any interest which may have accrued and all expenses that have
been incurred by the Company by reason of such non-payment. Such notice shall
name a day (not earlier than the expiration of fourteen days from the date of
giving of the notice) on or before which the payment required by the notice is
to be made, and shall state that, in the event of non-payment at or before the
time appointed the Shares in respect of which such notice was given will be
liable to be forfeited.

         (b)      If the requirements of any such notice as aforesaid are not
complied with, any Share in respect of which the notice has been given may at
any time thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the Directors to that effect. Such forfeiture shall
include all dividends declared in respect of the forfeited Share and not
actually paid before the forfeiture.

         (c)      A forfeited Share may be sold or otherwise disposed of on such
terms and in such manner as the Directors think fit, and at any time before a
sale or disposition, the forfeiture may be cancelled on such terms as the
Directors see fit.

36.      A person whose Shares have been forfeited shall cease to be a Member in
respect of the forfeited Shares, but shall, notwithstanding, remain liable to
pay to the Company all monies which, at the date of forfeiture, were payable by
him to the Company in respect of the Shares together with interest thereon, but
his liability shall cease if and when the Company shall have received payment in
full of all monies whenever payable in respect of the Shares.

37.      A certificate in writing under the hand of one Director or the
Secretary of the Company that a Share in the Company has been duly forfeited on
a date stated in the declaration shall be conclusive evidence of the fact
therein stated as against all persons



                                       9

                                                                     EXHIBIT 3.2

claiming to be entitled to the Share. The Company may receive the consideration
given for the Share on any sale or disposition thereof and may execute a
transfer of the Share in favour of the person to whom the Share is sold or
disposed of and he shall thereupon be registered as the holder of the Share and
shall not be bound to see to the application of the purchase money, if any, nor
shall his title to the Share be affected by any irregularity or invalidity in
the proceedings in reference to the forfeiture, sale or disposal of the Share.

38.      The provisions of these Articles as to forfeiture shall apply in the
case of non-payment of any sum which, by the terms of issue of a Share, becomes
payable at a fixed time, whether on account of the nominal value of the Share or
by way of premium as if the same had been payable by virtue of a call duly made
and notified.

                     REGISTRATION OF EMPOWERING INSTRUMENTS

39.      The Company shall be entitled to charge a fee not exceeding one dollar
(US$1.00) on the registration of every probate, letter of administration,
certificate of death or marriage, power of attorney, or other instrument.

                             TRANSMISSION OF SHARES

40.      In case of the death of a Member, the survivor or survivors where the
deceased was a joint holder, and the legal personal representatives of the
deceased where he was a sole holder, shall be the only persons recognised by the
Company as having any title to his interest in the Shares, but nothing herein
contained shall release the estate of any such deceased holder from any
liability in respect of any Shares which had been held by him solely or jointly
with other persons.

41.      (a)      Any person becoming entitled to a Share in consequence of the
death or bankruptcy or liquidation or dissolution of a Member (or in any other
way than by transfer) may, upon such evidence being produced as may from time to
time be required by the Directors and subject as hereinafter provided, elect
either to be registered himself as holder of the Share or to make such transfer
of the Share to such other person nominated by him as the deceased or bankrupt
person could have made and to have such person registered as the transferee
thereof, but the Directors shall, in either case, have the same right to decline
or suspend registration as they would have had in the case of a transfer of the
Share by that Member before his death or bankruptcy as the case may be.

         (b)      If the person so becoming entitled shall elect to be
registered himself as holder he shall deliver or send to the Company a notice in
writing signed by him stating that he so elects.

42.      A person becoming entitled to a Share by reason of the death or
bankruptcy or liquidation or dissolution of the holder (or in any other case
than by transfer) shall be entitled to the same dividends and other advantages
to which he would be entitled if he were the registered holder of the Share,
except that he shall not, before being registered as a Member in respect of the
Share, be entitled in respect of it to exercise any right conferred by
membership in relation to meetings of the Company, provided, however, that the
Directors



                                       10

                                                                     EXHIBIT 3.2

may at any time give notice requiring any such person to elect either to be
registered himself or to transfer the Share, and if the notice is not complied
with within ninety days, the Directors may thereafter withhold payment of all
dividends, bonuses or other monies payable in respect of the Share until the
requirements of the notice have been complied with.

                     AMENDMENT OF MEMORANDUM OF ASSOCIATION,
         ALTERATION OF CAPITAL & CHANGE OF LOCATION OF REGISTERED OFFICE

43.      (a)      The Company may by Ordinary Resolution:

                  (i)      increase the share capital by such sum as the
resolution shall prescribe and with such rights, priorities and privileges
annexed thereto, as the Company in general meeting may determine;

                  (ii)     consolidate and divide all or any of its share
capital into Shares of larger amount than its existing Shares;

                  (iii)    by subdivision of its existing Shares or any of them
divide the whole or any part of its share capital into Shares of smaller amount
than is fixed by the Memorandum of Association or into Shares without par value;

                  (iv)     cancel any Shares that at the date of the passing of
the resolution have not been taken or agreed to be taken by any person.

         (b)      All new Shares created in accordance with the provisions of
the preceding Article shall be subject to the same provisions of the Articles
with reference to the payment of calls, liens, transfer, transmission,
forfeiture and otherwise as the Shares in the original share capital.

         (c)      Subject to the provisions of the Statue and the provisions of
these Articles as regards the matters to be dealt with by Ordinary Resolution,
the Company may by Special Resolution:

                  (i)      change its name;

                  (ii)     alter or add to these Articles;

                  (iii)    alter or add to the Memorandum with respect to any
objects, powers or other matters specified therein; and reduce its share capital
and any capital redemption reserve fund.

44.      Subject to the provisions of the Law, the Company may by resolution of
the Directors change the location of its Registered Office.

                CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE

45.      For the purpose of determining Members entitled to notice of or to vote
at any meeting of Members or any adjournment thereof, or Members entitled to
receive payment of



                                       11

                                                                     EXHIBIT 3.2

any dividend, or in order to make a determination of Members for any other
proper purpose, the Directors of the Company may provide that the register of
Members shall be closed for transfers for a stated period but not to exceed in
any case forty days. If the register of Members shall be so closed for the
purpose of determining Members entitled to notice of or to vote at a meeting of
Members, such register shall be so closed for at least ten days immediately
preceding such meeting and the record date for such determination shall be the
date of the closure of the register of Members.

46.      In lieu of or apart from closing the register of Members, the Directors
may fix in advance a date as the record date for any such determination of
Members entitled to notice of or to vote at a meeting of the Members and for the
purpose of determining the Members entitled to receive payment of any dividend
the Directors may, at or within 90 days prior to the date of declaration of such
dividend fix a subsequent date as the record date for such determination.

47.      If the register of Members is not so closed and no record date is fixed
for the determination of Members entitled to notice of or to vote at a meeting
of Members or Members entitled to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which the resolution of the
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of Members. When a determination of Members
entitled to vote at any meeting of Members has been made as provided in this
section, such determination shall apply to any adjournment thereof.

                                 GENERAL MEETING

48.      All general meetings other than annual general meetings shall be called
extraordinary general meetings.

49.      (a)      The Company shall, if required by the Law, in each year hold a
general meeting as its annual general meeting and shall specify the meeting as
such in the notices calling it. The annual general meeting shall be held at such
time and place as the Directors shall appoint and if no other time and place is
prescribed by them, it shall be held at the Registered Office on the second
Wednesday in December of each year at ten o'clock in the morning.

         (b)      At these meetings the report of the Directors (if any) shall

be presented.

         (c)      The Company may hold an annual general meeting but shall not
(unless required by Law) be obliged to hold an annual general meeting.

50.      (a)      The Directors may call general meetings, and they shall on a
gMembers requisition forthwith proceed to convene an extraordinary general
meeting of the Company.

         (b)      A Members requisition is a requisition of Members of the
Company holding at the date of deposit of the requisition not less than ten per
cent. in par value of the capital of the Company as at that date carries the
right of voting at general meetings of the Company.



                                       12

                                                                     EXHIBIT 3.2

         (c)      The requisition must state the objects of the meeting and must
be signed by the requisitionists and deposited at the Registered Office, and may
consist of several documents in like form each signed by one or more
requisitionists.

         (d)      If the Directors do not within twenty-one days from the date
of the deposit of the requisition duly proceed to convene a general meeting to
be held within a further twenty-one days, the requisitionists, or any of them
representing more than one-half of the total voting rights of all of them, may
themselves convene a general meeting, but any meeting so convened shall not be
held after the expiration of three months after the expiration of the second
said twenty-one days.

         (e)      A general meeting convened as aforesaid by requisitionists
shall be convened in the same manner as nearly as possible as that in which
general meetings are to be convened by Directors.

                           NOTICE OF GENERAL MEETINGS

51.      At least seven days' notice shall be given for any general meeting.
Every notice shall be exclusive of the day on which it is given or deemed to be
given and of the day for which it is given and shall specify the place, the day
and the hour of the meeting and the general nature of the business and shall be
given in the manner hereinafter mentioned or in such other manner if any as may
be prescribed by the Company, provided that a general meeting of the Company
shall, whether or not the notice specified in this regulation has been given and
whether or not the provisions of Articles regarding general meetings have been
complied with, be deemed to have been duly convened if it is so agreed:

         (a)      in the case of an annual general meeting by all the Members
(or their proxies) entitled to attend and vote thereat; and

         (b)      in the case of an extraordinary general meeting by a majority
in number of the Members (or their proxies) having a right to attend and vote at
the meeting, being a majority together holding not less than ninety-five per
cent in par value of the Shares giving that right.

52.      The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a meeting by any person entitled to receive notice
shall not invalidate the proceedings of that meeting.

                         PROCEEDINGS AT GENERAL MEETINGS

53.      For all purposes the quorum for a general meeting shall be two Members
present in person or by proxy or corporate representative provided always that
if the Company has only one member of record the quorum shall be that one member
present in person or by proxy; provided, however, that in no case shall such
quorum be less than 33% of the outstanding voting shares in the capital of the
Company. No business (except the appointment of a Chairman of the meeting) shall
be transacted at any general meeting unless the requisite quorum shall be
present at the commencement of the business.



                                       13

                                                                     EXHIBIT 3.2

54.      A person may participate at a general meeting by conference telephone
or other communications equipment by means of which all the persons
participating in the meeting can communicate with each other. Participation by a
person in a general meeting in this manner is treated as presence in person at
that meeting.

55.      A resolution (including a Special Resolution) in writing (in one or
more counterparts) signed by all Members for the time being entitled to receive
notice of and to attend and vote at general meetings (or, being corporations,
signed by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of the Company duly
convened and held.

56.      If a quorum is not present within half an hour from the time appointed
for the meeting or if during such a meeting a quorum ceases to be present, the
meeting, if convened upon the requisition of Members, shall be dissolved and in
any other case it shall stand adjourned to the same day in the next week at the
same time and place or to such other day, time or such other place as the
Directors may determine, and if at the adjourned meeting a quorum is not present
within half an hour from the time appointed for the meeting, the Members present
shall be a quorum.

57.      The person chairing the meeting, if any, of the Board of Directors
shall preside as Chairman at every general meeting of the Company, or if there
is no such Chairman, or if he shall not be present within fifteen minutes after
the time appointed for the holding of the meeting, or is unwilling to act, the
Directors present shall elect one of their number to be Chairman of the meeting.

58.      If no Director is willing to act as Chairman or if no Director is
present within fifteen minutes after the time appointed for holding the meeting,
the Members present shall choose one of their number to be Chairman of the
meeting.

59.      The Chairman may, with the consent of a meeting at which a quorum is
present, (and shall if so directed by the meeting), adjourn the meeting from
time to time and from place to place, but no business shall be transacted at any
adjourned meeting other than the business left unfinished at the meeting from
which the adjournment took place. When a general meeting is adjourned for thirty
days or more, notice of the adjourned meeting shall be given as in the case of
an original meeting; otherwise it shall not be necessary to give any such
notice.

60.      A resolution put to the vote of the meeting shall be decided on a show
of hands unless before or on the declaration of the result of, the show of
hands, the Chairman demands a poll, or any other Member or Members collectively
present in person or by proxy and holding at least ten per cent. in par value of
the Shares giving a right to attend and vote at the meeting demand a poll.

61.      Unless a poll is duly demanded a declaration by the Chairman that a
resolution has been carried, or carried unanimously, or by a particular
majority, or lost, or not carried by a particular majority, an entry to that
effect in the minutes of the proceedings of the meeting shall be conclusive
evidence of that fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution.

62.      The demand for a poll may be withdrawn.



                                       14

                                                                     EXHIBIT 3.2

63.      Unless a poll is duly demanded, on the election of a Chairman or on a
question of adjournment, a poll shall be taken as the Chairman directs and the
result of the poll shall be deemed to be the resolution of the general meeting
at which the poll was demanded.

64.      In the case of an equality of votes, whether on a show of hands or on a
poll, the Chairman shall be entitled to a second or casting vote.

65.      A poll demanded on the election of a Chairman or on a question of
adjournment shall be taken forthwith. A poll demanded on any other question
shall be taken at such time as the Chairman of the general meeting directs, and
any business other than that upon which a poll has been demanded or is
contingent thereon may proceed pending the taking of the poll.

                                VOTES OF MEMBERS

66.      Except as otherwise required by law or as set forth herein, the holder
of each Share issued and outstanding shall have one vote for each Share held by
such holder.

67.      In the case of joint holders of record the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders, and for this purpose
seniority shall be determined by the order in which the names stand in the
register of Members.

68.      A Member of unsound mind, or in respect of whom an order has been made
by any court, having jurisdiction in lunacy, may vote, whether on a show of
hands or on a poll, by his committee, receiver, curator bonis, or other person
in the nature of a committee, receiver or curator bonis appointed by that court,
and any such committee, receiver, curator bonis or other persons may vote by
proxy.

69.      No Member shall be entitled to vote at any general meeting unless he is
registered as a Member of the Company on the record date for such meeting nor
unless all calls or other sums presently payable by him in respect of Shares in
the Company have been paid.

70.      No objection shall be raised to the qualification of any voter except
at the general meeting or adjourned general meeting at which the vote objected
to is given or tendered and every vote not disallowed at such general meeting
shall be valid for all purposes. Any such objection made in due time shall be
referred to the Chairman of the general meeting whose decision shall be final
and conclusive.

71.      On a poll or on a show of hands votes may be given either personally or
by proxy.

                                     PROXIES

72.      The instrument appointing a proxy shall be in writing and shall be
executed under the hand of the appointor or of his attorney duly authorised in
writing, or, if the appointor is a corporation under the hand of an officer or
attorney duly authorised for that purpose. A proxy need not be a Member of the
Company.



                                       15

                                                                     EXHIBIT 3.2

73.      The instrument appointing a proxy shall be deposited at the Registered
Office or at such other place as is specified for that purpose in the notice
convening the meeting, or in any instrument of proxy sent out by the Company:

         (a)      not less than 48 hours before the time for holding the meeting
or adjourned meeting at which the person named in the instrument proposes to
vote; or

         (b)      in the case of a poll taken more than 48 hours after it is
demanded, be deposited as aforesaid after the poll has been demanded and not
less than 24 hours before the time appointed for the taking of the poll; and

         (c)      where the poll is not taken forthwith but is taken not more
than 48 hours after it was demanded be delivered at the meeting at which the
poll was demanded to the Chairman or to the secretary or to any director;

provided that the Directors may in the notice convening the meeting, or in an
instrument of proxy sent out by the Company, direct that the instrument
appointing a proxy may be deposited (no later than the time for holding the
meeting or adjourned meeting) at the Registered Office or at such other place as
is specified for that purpose in the notice convening the meeting, or in any
instrument of proxy sent out by the Company. The Chairman may in any event at
his discretion direct that an instrument of proxy shall be deemed to have been
duly deposited. An instrument of proxy that is not deposited in the manner
permitted shall be invalid.

74.      The instrument appointing a proxy may be in any usual or common form
and may be expressed to be for a particular meeting or any adjournment thereof
or generally until revoked. An instrument appointing a proxy shall be deemed to
include the power to demand or join or concur in demanding a poll.

75.      Votes given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death or insanity of the principal
or revocation of the proxy or of the authority under which the proxy was
executed, or the transfer of the Share in respect of which the proxy is given
unless notice in writing of such death, insanity, revocation or transfer was
received by the Company at the Registered Office before the commencement of the
general meeting, or adjourned meeting at which it is sought to use the proxy.

76.      Any corporation or other non-natural person which is a Member may in
accordance with its constitutional documents, or in the absence of such
provision by resolution of its Directors or other governing body, authorise such
person as it thinks fit to act as its representative at any meeting of the
Company or of any class of Members, and the person so authorised shall be
entitled to exercise the same powers on behalf of the corporation which he
represents as the corporation could exercise if it were an individual Member. A
person entitled to more than one vote on a poll need not use all his votes or
cast all the votes he uses in the same way.

77.      Shares in the Company that are beneficially owned by the Company shall
not be voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding Shares at any given time.



                                       16

                                                                     EXHIBIT 3.2

                            CORPORATE REPRESENTATIVES

78.      Any corporation which is a Member of the Company may, by resolution of
its directors or other governing body or by power of attorney, authorise such
person as it thinks fit to act as its representative at any meeting of the
Company or of members of any class of Shares of the Company and the person so
authorised shall be entitled to exercise the same powers on behalf of the
corporation which be represents as that corporation could exercise if it were an
individual member of the Company and where a corporation is so represented, it
shall be treated as being present at any meeting in person.

                                 CLEARING HOUSES

79.      If a clearing house (or its nominee) is a member of the Company it may,
by resolution of its directors or other governing body or by power of attorney,
authorise such person or persons as it thinks fit to act as its representative
or representatives at any general meeting of the Company or at any general
meeting of any class of members of the Company provided that, if more than one
person is so authorised, the authorisation shall specify the number and class of
Shares in respect of which each such person is so authorised. A person so
authorised pursuant to this provision shall be entitled to exercise the same
powers on behalf of the clearing house (or its nominee) which he represents as
that clearing house (or its nominee) could exercise if it were an individual
member of the Company holding the number and class of Shares specified in such
authorisation.

                                    DIRECTORS

80.      There shall be a Board of Directors (the "BOARD") consisting of not
more than eight (8) persons, including three (3) independent directors. One (1)
member of the Board shall be appointed by Carlyle Asia Venture Partners I, L.P.
and CIPA Co-Investment, L.P. or their assigns (collectively, "CARLYLE"). One (1)
member of the Board shall be appointed by IDG Technology Venture Investment,
Inc. and IDG Technology Venture Investments, L.P. or their assigns
(collectively, "IDG"). Neil Nanpeng Shen, James Jiangzhang Liang, Qi Ji and Min
Fan and their respective assigns shall be entitled collectively to elect three
(3) members of the Board. Three (3) independent members of the Board shall be
nominated and approved by the vote of holders of a majority of the Shares.

81.      For as long as a shareholder not otherwise represented on the Board
holds at least 5% of the then outstanding Shares of the Company, such
shareholder shall be entitled to appoint one (1) observer to attend all meetings
of the Board (whether in person, telephonic or otherwise) in a non-voting,
observer capacity; provided, however, such observer may be excluded from all or
any portion of a meeting where their presence could reasonably result in (i) the
disclosure of trade secrets to a competitor or (ii) the loss of attorney-client
privilege. All observers shall enter into a confidentiality agreement with the
Company prior to exercising observation rights.

82.      Each Director shall hold office until the expiration of his term and
until his successor shall have been elected and qualified.

83.      Any Directors not elected in the manner provided in Article 80 shall be
elected by the Members at a general meeting. Newly created directorships
resulting from any increase in the authorised number of Directors or any
vacancies in the Board resulting from death, resignation, retirement,
disqualification, removal from office or other cause may be filled



                                       17

                                                                     EXHIBIT 3.2

only by a majority vote of the Directors then in office even though less than a
quorum, or by a sole remaining director, and not by the shareholders. In the
event of any increase or decrease in the authorised number of Directors, each
Director then serving as such shall nevertheless continue as a Director until
the expiration of his or her current term or his or her death, retirement,
removal or resignation. In the event of a vacancy in the Board, the remaining
Directors, except as otherwise provided by the Law, may exercise the powers of
the full Board until the vacancy is filled. Notwithstanding the foregoing, each
Director shall serve until his or her successor is duly elected and qualified or
until his or her death, resignation or removal. No decrease in the number of
directors constituting the Board shall shorten the term of any incumbent
Director.

84.      The remuneration to be paid to the Directors shall be such remuneration
as the Directors shall determine. Such remuneration shall be deemed to accrue
from day to day. The Directors shall also be entitled to be paid their
travelling, hotel and other expenses properly incurred by them in going to,
attending and returning from meetings of the Directors, or any committee of the
Directors, or general meetings of the Company, or otherwise in connection with
the business of the Company, or to receive a fixed allowance in respect thereof
as may be determined by the Directors from time to time, or a combination partly
of one such method and partly the other.

85.      The Directors may by resolution award special remuneration to any
Director of the Company undertaking any special work or services for, or
undertaking any special mission on behalf of, the Company other than his
ordinary routine work as a Director. Any fees paid to a Director who is also
counsel or solicitor to the Company, or otherwise serves it in a professional
capacity shall be in addition to his remuneration as a Director.

86.      A Director or alternate Director may hold any other office or place of
profit under the Company (other than the office of Auditor) in conjunction with
his office of Director for such period and on such terms as to remuneration and
otherwise as the Directors may determine.

87.      A Director or alternate Director may act by himself or his firm in a
professional capacity for the Company and he or his firm shall be entitled to
remuneration for professional services as if he were not a Director or alternate
Director.

88.      A shareholding qualification for Directors may not be fixed by the
Company in general meeting.

89.      The Company shall keep at its Registered Office a register of Directors
and officers containing their names and addresses and occupations and other
particulars required by the Law and shall send to the Registrar of Companies of
the Cayman Islands a copy of such register and shall from time to time notify to
the Registrar of Companies of the Cayman Islands any change that takes place in
relation to such Directors and officers as required by Law.

                               ALTERNATE DIRECTORS

90.      A Director who expects to be unable to attend Directors' Meetings
because of absence, illness or otherwise may appoint any person to be an
alternate Director to act in his stead and such appointee whilst he holds office
as an alternate Director shall, in the event of



                                       18

                                                                     EXHIBIT 3.2

absence therefrom of his appointor, be entitled to attend meetings of the
Directors and to vote thereat and to do, in the place and stead of his
appointor, any other act or thing which his appointor is permitted or required
to do by virtue of his being a Director as if the alternate Director were the
appointor, other than appointment of an alternate to himself, and he shall ipso
facto vacate office if and when his appointor ceases to be a Director or removes
the appointee from office. Any appointment or removal under this Article shall
be effected by notice in writing under the hand of the Director making the same.

91.      The appointment of an alternate Director shall determine on the
happening of any event which, were he a Director, would cause him to vacate such
office or if his appointor ceases to be a Director.

92.      An alternate Director shall be entitled to receive and waive (in lieu
of his appointor) notices of meetings of the Directors and shall be entitled to
attend and vote as a Director and be counted in the quorum at any such meeting
at which the Director appointing him is not personally present and generally at
such meeting to perform all the functions of his appointor as a Director and for
the purposes of the proceedings at such meeting the provisions of these Articles
shall apply as if he (instead of his appointor) were a Director. If he shall be
himself a Director or shall attend any such meeting as an alternate for more
than one Director, his voting rights shall be cumulative and he need not use all
his votes or cast all the votes to uses in the same way. To such extent as the
Board may from time to time determine in relation to any committee of the Board,
the foregoing provisions of this Article shall also apply mutatis mutandis to
any meeting of any such committee of which his appointor is a member. An
alternate Director shall not, save as aforesaid, have power to act as a Director
nor shall he be deemed to be a Director for the purposes of these Articles.

93.      An alternate Director shall be entitled to contract and be interested
in and benefit from contracts, arrangements or transactions and to be repaid
expenses and to be indemnified to the same extent mutatis mutandis as if he were
a Director, but he shall not be entitled to receive from the Company in respect
of his appointment as alternate Director any remuneration except only such part
(if any) of the remuneration otherwise payable to his appointor as such
appointor may by notice in writing to the Company from time to time direct.

94.      In addition to the foregoing provisions of this Article, a Director may
be represented at any meeting of the Board (or of any committee of the Board) by
a proxy appointed by him, is which event the presence or vote of the proxy shall
for all purposes be deemed to be that of the Director. A proxy need not himself
be a Director and the provisions of Articles [72] to [77] shall apply mutatis
mutandis to the appointment of proxies by Directors save that an instrument
appointing a proxy shall not become invalid after the expiration of twelve
months from its date of execution but shall remain valid for such period as the
instrument shall provide or, if no such provision is made in the instrument,
until revoked in writing and save also that a Director may appoint any number of
proxies although only one such proxy may attend in his stead at meetings of the
Board).

                         POWERS AND DUTIES OF DIRECTORS

95.      The business of the Company shall be managed by the Directors (or a
sole Director if only one is appointed) who may pay all expenses incurred in
promoting, registering and



                                       19

                                                                     EXHIBIT 3.2

setting up the Company, and may exercise all such powers of the Company as are
not, from time to time by the Law, or by these Articles, or such regulations,
being not inconsistent with the aforesaid, as may be prescribed by the Company
in general meeting required to be exercised by the Company in general meeting,
provided, however, that no regulations made by the Company in general meeting
shall invalidate any prior act of the Directors which would have been valid if
that regulation had not been made.

96.      The Directors may from time to time and at any time by powers of
attorney appoint any company, firm, person or body of persons, whether nominated
directly or indirectly by the Directors, to be the attorney or attorneys of the
Company for such purpose and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Directors under these Articles)
and for such period and subject to such conditions as they may think fit, and
any such powers of attorney may contain such provisions for the protection and
convenience of persons dealing with any such attorneys as the Directors may
think fit and may also authorise any such attorney to delegate all or any of the
powers, authorities and discretions vested in him.

97.      All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid to the Company shall be
signed, drawn, accepted, endorsed or otherwise executed as the case may be in
such manner as the Directors shall from time to time by resolution determine.

98.      The Directors shall cause minutes to be made in books provided for the
purpose:

         (a)      of all appointments of officers made by the Directors;

         (b)      of the names of the Directors (including those represented
thereat by an alternate or by proxy) present at each meeting of the Directors
and of any committee of the Directors;

         (c)      of all resolutions and proceedings at all meetings of the
Company and of the Directors and of committees of Directors.

99.      The Directors on behalf of the Company may pay a gratuity or pension or
allowance on retirement to any Director who has held any other salaried office
or place of profit with the Company or to his widow or dependants and may make
contributions to any fund and pay premiums for the purchase or provision of any
such gratuity, pension or allowance.

100.     The Directors may exercise all the powers of the Company to borrow
money and to mortgage or charge its undertaking, property and uncalled capital
or any part thereof and to issue debentures, debenture stock and other
securities whether outright or as security for any debt, liability or obligation
of the Company or of any third party.

                                   MANAGEMENT

101.     (a)      The Directors may from time to time provide for the management
of the affairs of the Company in such manner as they shall think fit and the
provisions contained in the three next following paragraphs shall be without
prejudice to the general powers conferred by this paragraph.



                                       20

                                                                     EXHIBIT 3.2

         (b)      The Directors from time to time and at any time may establish
any committees, local boards or agencies for managing any of the affairs of the
Company and may appoint any persons to be members of such committees or local
boards or any managers or agents and may fix their remuneration.

         (c)      The Directors from time to time and at any time may delegate
to any such committee, local board, manager or agent any of the powers,
authorities and discretions for the time being vested in the Directors and may
authorise the members for the time being of any such local board, or any of them
to fill up any vacancies therein and to act notwithstanding vacancies and any
such appointment or delegation may be made on such terms and subject to such
conditions as the Directors may think fit and the Directors may at any time
remove any person so appointed and may annul or vary any such delegation, but no
person dealing in good faith and without notice of any such annulment or
variation shall be affected thereby.

         (d)      Any such delegates as aforesaid may be authorised by the
Directors to subdelegate all or any of the powers, authorities, and discretions
for the time being vested in them.

                              INTERESTED DIRECTORS

102.     No Director or proposed Director shall be disqualified by his office
from contracting with the Company either as vendor, purchaser or otherwise nor
shall any such contract or any contract or arrangement entered into by or on
behalf of the Company with any person, company or partnership of or in which any
Director shall be a member or otherwise interested be capable on that account of
being avoided, nor shall any Director so contracting or being any member or so
interested be liable to account to the Company for any profit so realised by any
such contract or arrangement by reason only of such Director holding that office
or the fiduciary relationship, thereby established, provided that such Director
shall, if his interest in such contract or arrangement is material, declare the
nature of his interest at the earliest meeting of the Board at which it is
practicable for him to do so, either specifically or by way of a general notice
stating that, by reason of the facts specified in the notice, he is to be
regarded as interested in any contracts of a specified description which may
subsequently be made by the Company.

103.     Any Director may continue to be or become a director, managing
director, joint managing director, deputy managing director, executive director,
manager or other officer or member of any other company in which the Company may
be interested and (unless otherwise agreed between the Company and the Director)
no such Director shall be liable to account to the Company or the members for
any remuneration or other benefits received by him as a director, managing
director, joint managing director, deputy managing director, executive director,
manager or other officer or member of any such other company. The Directors may
exercise the voting powers conferred by the shares in any other company held or
owned by the Company, or exercisable by them as directors of such other company
in such manner in all respects as they think fit (including the exercise thereof
in favour of any resolution appointing themselves or any of them directors,
managing directors, joint managing directors; deputy managing directors,
executive directors, managers or other officers of such company) and any
Director may vote in favour of the exercise of such voting rights in the manner
aforesaid notwithstanding that he may be, or is about to be, appointed a



                                       21

                                                                     EXHIBIT 3.2

director, managing director, joint managing director, deputy managing director,
executive director, manager or other officer of such a company, and that as such
he is or may become interested in the exercise of such voting rights in the
manner aforesaid.

104.     A Director may hold any other office or place of profit with the
Company (except that of Auditor) in conjunction with his office of Director for
such period and upon such terms as the Board may determine, and may be paid such
extra remuneration therefor (whether by way of salary, commission, participation
in profit or otherwise) as the Board may determine, and such extra remuneration
shall be in addition to any remuneration provided for by or pursuant to any
other Article.

105.     No person shall be disqualified from the office of Director or
alternate Director or prevented by such office from contracting with the
Company, either as vendor, purchaser or otherwise, nor shall any such contract
or any contract or transaction entered into by or on behalf of the Company in
which any Director or alternate Director shall be in any way interested be or be
liable to be avoided, nor shall any Director or alternate Director so
contracting or being so interested be liable to account to the Company for any
profit realised by any such contract or transaction by reason of such Director
holding office or of the fiduciary relation thereby established. A Director (or
his alternate Director in his absence) shall be at liberty to vote in respect of
any contract or transaction in which he is so interested as aforesaid provided
however that the name of the interest of any Director or alternate Director in
any such contract or transaction shall be disclosed by him or the alternate
Director appointed by him at or prior to its consideration and any vote thereon.

106.     A general notice or disclosure to the Directors or otherwise contained
in the minutes of a Meeting or a written resolution of the Directors or any
committee thereof that a Director or alternate Director is a shareholder of any
specified firm or company and is to be regarded as interested in any transaction
with such firm or company shall be sufficient disclosure under Article 105 and
after such general notice it shall not be necessary to give special notice
relating to any particular transaction.

                               MANAGING DIRECTORS

107.     The Directors may, from time to time, appoint one or more of their body
(but not an alternate Director) to the office of Managing Director for such term
and at such remuneration (whether by way of salary, or commission, or
participation in profits, or partly in one way and partly in another) as they
may think fit but his appointment shall be subject to determination ipso facto
if he ceases for any cause to be a Director and no alternate Director appointed
by him can act in his stead as a Director or Managing Director.

108.     The Directors may entrust to and confer upon a Managing Director any of
the powers exercisable by them upon such terms and conditions and with such
restrictions as they may think fit and either collaterally with or to the
exclusion of their own powers and may from time to time revoke, withdraw, alter
or vary all or any of such powers.



                                       22

                                                                     EXHIBIT 3.2

                            PROCEEDINGS OF DIRECTORS

109.     Except as otherwise provided by these Articles, the Directors shall
meet together for the despatch of business, convening, adjourning and otherwise
regulating their meetings as they think fit. Questions arising at any meeting
shall be decided by a majority of votes of the Directors and alternate Directors
present at a meeting at which there is a quorum, the vote of an alternate
Director not being counted if his appointor be present at such meeting. In case
of an equality of votes, the Chairman shall have a second or casting vote.

110.     A Director or alternate Director may, and the Secretary on the
requisition of a Director or alternate Director shall, at any time summon a
meeting of the Directors by at least two days' notice in writing to every
Director and alternate Director which notice shall set forth the general nature
of the business to be considered unless notice is waived by all the Directors
(or their alternates) either at, before or after the meeting is held and,
provided, however, if notice is given in person, by cable, telex or telecopy the
same shall be deemed to have been given on the day it is delivered to the
Directors or transmitting organisation as the case may be. The provisions of
Article [51] shall apply mutatis mutandis with respect to notices of meetings of
Directors.

111.     The quorum necessary for the transaction of the business of the
Directors may be fixed by the Directors and unless so fixed shall be two, a
Director and his appointed alternate Director being considered only one person
for this purpose, provided always that if there shall at any time be only a sole
Director the quorum shall be one. For the purposes of this Article an alternate
Director or proxy appointed by a Director shall be counted in a quorum at a
meeting at which the Director appointing him is not present.

112.     The continuing Directors may act notwithstanding any vacancy in their
body, but if and so long as their number is reduced below the number fixed by or
pursuant to these Articles as the necessary quorum of Directors or of summoning
a general meeting of the Company, but for no other purpose.

113.     The Directors may elect a Chairman of their Board and determine the
period for which he is to hold office; but if no such Chairman is elected, or if
at any meeting the Chairman is not present within five minutes after the time
appointed for holding the same, the Directors present may choose one of their
number to be Chairman of the meeting.

114.     The Directors may delegate any of their powers to committees consisting
of such member or members of the Board of Directors (including Alternate
Directors in the absence of their appointors) as they think fit; any committee
so formed shall in the exercise of the powers so delegated conform to any
regulations that may be imposed on it by the Directors.

115.     A committee may meet and adjourn as it thinks proper. Questions arising
at any meeting shall be determined by a majority of votes of the members
present, and in the case of an equality of votes the Chairman shall have a
second or casting vote.

116.     All acts done by any meeting of the Directors or of a committee of
Directors (including any person acting as an alternate Director) shall,
notwithstanding that it be afterwards discovered that there was some defect in
the appointment of any Director or alternate Director, or that they or any of
them were disqualified, be as valid as if every such person had been duly
appointed and qualified to be a Director or alternate Director as the case may
be.



                                       23

                                                                     EXHIBIT 3.2

         Members of the Board of Directors or of any committee thereof may
participate in a meeting of the Board or of such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting. A resolution in writing (in one or more counterparts), signed by all
the Directors for the time being or all the members of a committee of Directors
(an alternate Director being entitled to sign such resolution on behalf of his
appointor) shall be as valid and effectual as if it had been passed at a meeting
of the Directors or committee as the case may be duly convened and held.

                         VACATION OF OFFICE OF DIRECTOR

117.     The office of a Director shall be vacated:

         (a)      if he gives notice in writing to the Company that he resigns
the office of Director; or

         (b)      if he absents himself (without being represented by proxy or
an alternate Director appointed by him) from three consecutive meetings of the
Board of Directors without special leave of absence from the Directors, and they
pass a resolution that he has by reason of such absence vacated office; or

         (c)      if he dies, becomes bankrupt or makes any arrangement or
composition with his creditors generally; or

         (d) if he is found to be or becomes of unsound mind.

                      APPOINTMENT AND REMOVAL OF DIRECTORS

118.     The Directors of the Company may only be appointed as provided in
Articles [80] and [83].

119.     A Director of the Company shall only be removed by the Members who
nominated and elected him.

                              PRESUMPTION OF ASSENT

120.     A Director of the Company who is present at a meeting of the Board of
Directors at which action on any Company matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
Minutes of the meeting or unless he shall file his written dissent from such
action with the person acting as the Chairman or Secretary of the meeting before
the adjournment thereof or shall forward such dissent by registered post to such
person immediately after the adjournment of the meeting. Such right to dissent
shall not apply to a Director who voted in favour of such action.



                                       24

                                                                     EXHIBIT 3.2

                                      SEAL

121.     (a)      The Company may, if the Directors so determine, have a Seal.
The Seal shall only be used by the authority of the Directors or of a committee
of the Directors authorised by the Directors. Every instrument to which the Seal
has been affixed shall be signed by at least one person who shall be either a
Director or some officer or other person appointed by the Directors for the
purpose.

         (b)      The Company may have for use in any place or places outside
the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile
of the Common Seal of the Company and, if the Directors so determine, with the
addition on its face of the name of every place where it is to be used.

         (c)      A Director or officer, representative or attorney may without
further authority of the Directors affix the Seal over his signature alone to
any document of the Company required to be authenticated by him under Seal or to
be filed with the Registrar of Companies in the Cayman Islands or elsewhere
wheresoever.

                                    OFFICERS

122.     The Company may have a President, a Secretary or Secretary-Treasurer
appointed by the Directors. The Directors may also from time to time appoint
such other officers as they consider necessary, all for such terms, at such
remuneration and to perform such duties, and subject to such provisions as to
disqualification and removal as the Directors from time to time prescribe.

                      DIVIDENDS, DISTRIBUTIONS AND RESERVE

123.     Subject to the Law, the Directors may from time to time declare
dividends (including interim dividends) and distributions on Shares of the
Company outstanding and authorise payment of the same out of the funds of the
Company lawfully available therefor.

124.     The Directors may, before declaring any dividends or distributions, set
aside such sums as they think proper as a reserve or reserves which shall at the
discretion of the Directors, be applicable for any purpose of the Company and
pending such application may, at the like discretion, be employed in the
business of the Company.

125.     No dividend or distribution shall be payable except out of the profits
of the Company, realised or unrealised, or out of the Share Premium Account or
as otherwise permitted by the Law.

126.     Subject to the rights of persons, if any, entitled to Shares with
special rights as to dividends or distributions, if dividends or distributions
are to be declared on a class of Shares they shall be declared and paid
according to the amounts paid or credited as paid on the Shares of such class
outstanding on the record date for such dividend or distribution as determined
in accordance with these Articles but no amount paid or credited as paid on a
Share in advance of calls shall be treated for the purpose of this Article as
paid on the Share.



                                       25

                                                                     EXHIBIT 3.2

127.     The Directors may deduct from any dividend or distribution payable to
any Member all sums of money (if any) presently payable by him to the Company on
account of calls or otherwise.

128.     The Directors may declare that any dividend or distribution be paid
wholly or partly by the distribution of specific assets and in particular of
paid up Shares, debentures, or debenture stock of any other company or in any
one or more of such ways and where any difficulty arises in regard to such
distribution, the Directors may settle the same as they think expedient and in
particular may issue fractional certificates and fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments
shall be made to any Members upon the footing of the value so fixed in order to
adjust the rights of all Members and may vest any such specific assets in
trustees as may seem expedient to the Directors.

129.     Any dividend, distribution, interest or other monies payable in cash in
respect of Shares may be paid by cheque or warrant sent through the post
directed to the registered address of the holder or, in the case of joint
holders, to the holder who is first named on the register of Members or to such
person and to such address as such holder or joint holders may in writing
direct. Every such cheque or warrant shall be made payable to the order of the
person to whom it is sent. Any one of two or more joint holders may give
effectual receipts for any dividends, bonuses, or other monies payable in
respect of the Share held by them as joint holders.

130.     No dividend or distribution shall bear interest against the Company.

                                  RECORD DATES

131.     Notwithstanding any other provisions of these Articles of the Company
or the Law, the Board may fix any date as the record date for any dividend,
distribution, allotment or issue and such record date may be on or at any time
before or after any date on which such dividend, distribution, allotment or
issue is declared, paid or made.

                                 CAPITALISATION

132.     The Company may capitalise any sum standing to the credit of any of the
Company's reserve accounts (including Share Premium Account and capital
redemption reserve fund) or any sum standing to the credit of profit and loss
account or otherwise available for distribution and to appropriate such sum to
Members in the proportions in which such sum would have been divisible amongst
them had the same been a distribution of profits by way of dividend and to apply
such sum on their behalf in paying up in full unissued Shares for allotment and
distribution credited as fully paid up to and amongst them in the proportion
aforesaid. In such event the Directors shall do all acts and things required to
give effect to such capitalisation, with full power to the Directors to make
such provisions as they think fit for the case of Shares becoming distributable
in fractions (including provisions whereby the benefit of fractional
entitlements accrue to the Company rather than to the Members concerned). The
Directors may authorise any person to enter on behalf of all of the Members
interested into an agreement with the Company providing for such capitalisation
and matters



                                       26

                                                                     EXHIBIT 3.2

incidental thereto and any agreement made under such authority shall be
effective and binding on all concerned.

                                BOOKS OF ACCOUNT

133.     The Directors shall cause proper books of account to be kept with
respect to:

         (a)      all sums of money received and expended by the Company and the
matters in respect of which the receipt or expenditure takes place;

         (b)      all sales and purchases of goods by the Company; and

         (c)      the assets and liabilities of the Company.

Proper books shall not be deemed to be kept if there are not kept such books of
account as are necessary to give a true and fair view of the state of the
Company's affairs and to explain its transactions.

134.     The Directors shall from time to time determine whether and to what
extent and at what times and places and under what conditions or regulations the
accounts and books of the Company or any of them shall be open to the inspection
of Members not being Directors and no Member (not being a Director) shall have
any right of inspecting any account or book or document of the Company except as
conferred by Law or authorised by the Directors or by the Company in general
meeting.

135.     The Directors may from time to time cause to be prepared and to be laid
before the Company in general meeting profit and loss accounts, balance sheets,
group accounts (if any) and such other reports and accounts as may be required
by law.

                           ANNUAL RETURNS AND FILINGS

136.     The Board shall make the requisite annual returns and any other
requisite filings in accordance with the Law.

                                      AUDIT

137.     The Directors may appoint an Auditor of the Company who shall hold
office until removed from office by a resolution of the Directors and may fix
his or their remuneration.

138.     Every Auditor of the Company shall have a right of access at all times
to the books and accounts and vouchers of the Company and shall be entitled to
require from the Directors and Officers of the Company such information and
explanation as may be necessary for the performance of the duties of the
auditors.

139.     Auditors shall, if so required by the Directors, make a report on the
accounts of the Company during their tenure of office at the next annual general
meeting following their



                                       27

                                                                     EXHIBIT 3.2

appointment in the case of a company which is registered with the Registrar of
Companies as an ordinary company, and at the next extraordinary general meeting
following their appointment in the case of a company which is registered with
the Registrar of Companies as an exempted company, and at any time during their
term of office, upon request of the Directors or any general meeting of the
Members.

                                     NOTICES

140.     Notices shall be in writing and may be given by the Company to any
Member either personally or by sending it by post, cable, telex, fax or e-mail
to him or to his address as shown in the register of Members (or where the
notice is given by e-mail by sending it to the e-mail address provided by such
Member). Any notice, if posted from one country to another, is to be sent
airmail.

141.     (a)      Where a notice is sent by post, service of the notice shall be
deemed to be effected by properly addressing, pre-paying and posting a letter
containing the notice, and shall be deemed to have been received on the fifth
day (not including Saturdays or Sundays or public holidays) following the day on
which the notice was posted.

         (b)      Where a notice is sent by cable, telex, or fax, service of the
notice shall be deemed to be effected by properly addressing, and sending such
notice and shall be deemed to have been received on the same day that it was
transmitted.

         (c)      Where a notice is given by e-mail service shall be deemed to
be effected by transmitting the e-mail to the e-mail address provided by the
intended recipient and shall be deemed to have been received on the same day
that it was sent, and it shall not be necessary for the receipt of the e-mail to
be acknowledged by the recipient.

142.     A notice may be given by the Company to the person or persons which the
Company has been advised are entitled to a Share or Shares in consequence of the
death or bankruptcy of a Member in the same manner as other notices which are
required to be given under these Articles and shall be addressed to them by
name, or by the title of representatives of the deceased, or trustee of the
bankrupt, or by any like description at the address supplied for that purpose by
the persons claiming to be so entitled, or at the option of the Company by
giving the notice in any manner in which the same might have been given if the
death or bankruptcy had not occurred.

143.     Notice of every general meeting shall be given in any manner
hereinbefore authorised to:

         (a)      every person shown as a Member in the register of Members on
the record date for such meeting except that in the case of joint holders the
notice shall be sufficient if given to the joint holder first named in the
register of Members; and

         (b)      every person upon whom the ownership of a Share devolves by
reason of his being a legal personal representative or a trustee in bankruptcy
of a Member of record where the Member of record but for his death or bankruptcy
would be entitled to receive notice of the meeting.



                                       28

                                                                     EXHIBIT 3.2

         No other person shall be entitled to receive notices of general
meetings.

                                   INFORMATION

144.     No Member shall be entitled to require discovery of or any information
in respect of any detail of the Company's trading or any which is or may be in
the nature of a trade secret or secret process which may relate to the conduct
of the business of the Company and which in the opinion of the Board would not
be in the interests of the Members of the Company to communicate to the public.

145.     The Board shall be entitled to release or disclose any information in
its possession, custody or control regarding the Company or its affairs to any
of its Members including, without limitation, information contained in the
register of Members and transfer books of the Company.

                                   WINDING UP

146.     Subject to Article 127, if the Company shall be wound up the liquidator
may, with the sanction of a Special Resolution of the Company and any other
sanction required by the Law, divide amongst the Members in kind the whole or
any part of the assets of the Company (whether they shall consist of property of
the same kind or not) and may for that purpose value any assets and determine
how the division shall be carried out as between the Members or different
classes of Members. The liquidator may, with the like sanction, vest the whole
or any part of such assets in trustees upon such trusts for the benefit of the
Members as the liquidator, with the like sanction, shall think fit, but so that
no Member shall be compelled to accept any asset upon which there is a
liability.

                                    INDEMNITY

147.     Every Director or officer of the Company shall be indemnified out of
the assets of the Company against any liability incurred by him as a result of
any act or failure to act in carrying out his functions other than such
liability (if any) that he may incur by his own wilful neglect or default. No
such Director or officer shall be liable to the Company for any loss or damage
in carrying out his functions unless that liability arises through the wilful
neglect or default of such Director or officer.

                                 FINANCIAL YEAR

148.     Unless the Directors otherwise prescribe, the financial year of the
Company shall end on 31st December in each year and shall begin on January 1st
in each year.



                                       29

                                                                     EXHIBIT 3.2

                             AMENDMENTS OF ARTICLES

149.     Subject to the Law and to any quorum, voting or procedural requirements
expressly imposed by these Articles in regard to the variation of rights
attached to a specific class of Shares of the Company, the Company may at any
time and from time to time by Special Resolution change the name of the Company
or alter or amend these Articles or the Company's Memorandum of Association, in
whole or in part.

                         TRANSFER BY WAY OF CONTINUATION

150.     If the Company is exempted as defined in the Law, it shall, subject to
the provisions of the Law and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws
of any jurisdiction outside the Cayman Islands and to be deregistered in the
Cayman Islands.




                                                                     EXHIBIT 4.1


               [REGISTRANT'S SPECIMEN AMERICAN DEPOSITARY RECEIPT]



               NUMBER

               BNY


                                            AMERICAN DEPOSITARY SHARES
                                            (EACH AMERICAN DEPOSITARY SHARE
                                            REPRESENTS  (  ) DEPOSITED SHARE[S])

                              THE BANK OF NEW YORK
                           AMERICAN DEPOSITARY RECEIPT
                           FOR ORDINARY SHARES OF THE
                       PAR VALUE OF U.S.$0.01 PER SHARE OF
                          CTRIP.COM INTERNATIONAL, LTD.
               (INCORPORATED UNDER THE LAWS OF THE CAYMAN ISLANDS)


         The Bank of New York as depositary (hereinafter called the
"Depositary"), hereby certifies that __________, or registered assigns IS THE
OWNER OF

                           AMERICAN DEPOSITARY SHARES

representing deposited ordinary shares (herein called "Shares") of Ctrip.com
International, Ltd., incorporated under the laws of the Cayman Islands (herein
called the "Company"). At the date hereof, each American Depositary Share
represents _________ ( ) Share[s] which [is/are] either deposited or subject to
deposit under the deposit agreement at the Hong Kong office of The Hongkong and
Shanghai Banking Corporation Limited (herein called the "Custodian"). The
Depositary's Corporate Trust Office is located at a different address than its
principal executive office. Its Corporate Trust Office is located at 101 Barclay
Street, New York, N.Y. 10286, and its principal executive office is located at
One Wall Street, New York, N.Y. 10286.

1.       THE DEPOSIT AGREEMENT.

         This American Depositary Receipt is one of an issue (herein called
"Receipts"), all issued and to be issued upon the terms and conditions set forth
in the deposit agreement, dated as of ________, 2003 (herein called the "Deposit
Agreement"), by and among the Company, the Depositary, and all Owners and
Beneficial Owners from time to time of Receipts issued thereunder, each of whom
by accepting a Receipt agrees to become a party thereto and become bound by all
the terms and conditions thereof. The Deposit Agreement sets forth the rights of
Owners and Beneficial Owners of the Receipts

                                     - 2 -




                                                                     EXHIBIT 4.1


and the rights and duties of the Depositary in respect of the Shares deposited
thereunder and any and all other securities, property and cash from time to time
received in respect of such Shares and held thereunder (such Shares, securities,
property, and cash are herein called "Deposited Securities"). Copies of the
Deposit Agreement are on file at the Depositary's Corporate Trust Office in New
York City and at the office of the Custodian.

         The statements made on the face and reverse of this Receipt are
summaries of certain provisions of the Deposit Agreement and are qualified by
and subject to the detailed provisions of the Deposit Agreement, to which
reference is hereby made. Capitalized terms not defined herein shall have the
meanings set forth in the Deposit Agreement.

2.       SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.

         Upon surrender at the Corporate Trust Office of the Depositary of this
Receipt, and upon payment of the fee of the Depositary provided in this Receipt,
and subject to the terms and conditions of the Deposit Agreement, the Owner
hereof is entitled to delivery, to him or upon his order, of the amount of
Deposited Securities at the time represented by the American Depositary Shares
for which this Receipt is issued. Delivery of such Deposited Securities may be
made by the delivery of (a) Shares in the name of the Owner hereof or as ordered
by him or by certificates properly endorsed or accompanied by proper instruments
of transfer to such Owner or as ordered by him and (b) any other securities,
property and cash to which such Owner is then entitled in respect of this
Receipt to such Owner or as ordered by him. Such delivery will be made at the
option of the Owner hereof, either at the office of the Custodian or at the
Corporate Trust Office of the Depositary, provided that the forwarding of
certificates for Shares or other Deposited Securities for such delivery at the
Corporate Trust Office of the Depositary shall be at the risk and expense of the
Owner hereof. Notwithstanding any other provision of the Deposit Agreement or
this Receipt, the surrender of outstanding Receipts and withdrawal of Deposited
Securities may be suspended only for (i) temporary delays caused by closing the
transfer books of the Depositary or the Company or the deposit of Shares in
connection with voting at a shareholders' meeting, or the payment of dividends,
(ii) the payment of fees, taxes and similar charges, and (iii) compliance with
any U.S. or foreign laws or governmental regulations relating to the Receipts or
to the withdrawal of the Deposited Securities.

3.       TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

         The transfer of this Receipt is registrable on the books of the
Depositary at its Corporate Trust Office by the Owner hereof in person or by a
duly authorized attorney, upon surrender of this Receipt properly endorsed for
transfer or accompanied by proper instruments of transfer and funds sufficient
to pay any applicable transfer taxes and the expenses of the Depositary and upon
compliance with such regulations, if any, as the Depositary may establish for
such purpose. This Receipt may be split into other such Receipts, or may be
combined with other such Receipts into one Receipt, evidencing the same
aggregate number of American Depositary Shares as the Receipt or Receipts



                                                                     EXHIBIT 4.1


surrendered. As a condition precedent to the execution and delivery,
registration of transfer, split-up, combination, or surrender of any Receipt or
withdrawal of any Deposited Securities, the Depositary, the Custodian, or
Registrar may require payment from the depositor of Shares or the presenter of
the Receipt of a sum sufficient to reimburse it for any tax, stamp duty or other
governmental charge and any stock transfer or registration fee with respect
thereto (including any such tax or charge and fee with respect to Shares being
deposited or withdrawn) and payment of any applicable fees as provided in this
Receipt, may require the production of proof satisfactory to it as to the
identity and genuineness of any signature and may also require compliance with
any regulations the Depositary may establish consistent with the provisions of
the Deposit Agreement or this Receipt.

         The delivery of Receipts against deposits of Shares generally or
against deposits of particular Shares may be suspended, or the transfer of
Receipts in particular instances may be refused, or the registration of transfer
of outstanding Receipts generally may be suspended, during any period when the
transfer books of the Depositary are closed, or if any such action is deemed
necessary or advisable by the Depositary or the Company at any time or from time
to time because of any requirement of law or of any government or governmental
body or commission, or under any provision of the Deposit Agreement or this
Receipt, or for any other reason, subject to Article (23) hereof. Without
limitation of the foregoing, the Depositary shall not knowingly accept for
deposit under the Deposit Agreement any Shares required to be registered under
the provisions of the Securities Act, unless a registration statement is in
effect as to such Shares.

4.       LIABILITY OF OWNER FOR TAXES.

         If any tax or other governmental charge shall become payable with
respect to any Receipt or any Deposited Securities represented hereby, such tax
or other governmental charge shall be payable by the Owner hereof to the
Depositary. The Depositary may refuse to effect any transfer of this Receipt or
any withdrawal of Deposited Securities represented by American Depositary Shares
evidenced by such Receipt until such payment is made, and may withhold any
dividends or other distributions, or may sell for the account of the Owner
hereof any part or all of the Deposited Securities represented by the American
Depositary Shares evidenced by this Receipt, and may apply such dividends or
other distributions or the proceeds of any such sale in payment of such tax or
other governmental charge and the Owner hereof shall remain liable for any
deficiency.

5.       WARRANTIES OF DEPOSITORS.

         Every person depositing Shares under the Deposit Agreement shall be
deemed thereby to represent and warrant that such Shares and each certificate
therefor, if applicable, are validly issued, fully paid, nonassessable and free
of any pre-emptive rights of the holders of outstanding Shares and that the
person making such deposit is duly authorized so to do. Every such person shall
also be deemed to represent that the deposit of such Shares and the sale of
Receipts evidencing American Depositary Shares representing such Shares by that
person would not be Restricted Securities. Such




                                                                     EXHIBIT 4.1


representations and warranties shall survive the deposit of Shares and issuance
of Receipts.



         Dated:

         Countersigned:                        THE BANK OF NEW YORK, as
                                               Depositary



                                               By: /s/ Timothy F. Keaney
         --------------------                      ----------------------
         Authorized Signatory                      Timothy F. Keaney
                                                   Managing Director



         THE DEPOSITARY'S CORPORATE TRUST OFFICE ADDRESS IS
         101 BARCLAY STREET, NEW YORK, N.Y.  10286







                                                                     EXHIBIT 4.1


         [REVERSE OF REGISTRANT'S SPECIMEN AMERICAN DEPOSITARY RECEIPT]


        SUMMARY OF CERTAIN ADDITIONAL PROVISIONS OF THE DEPOSIT AGREEMENT

6.       FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

         Any person presenting Shares for deposit or any Owner or Beneficial
Owner of a Receipt may be required from time to time to file with the Depositary
or the Custodian such proof of citizenship or residence, exchange control
approval, or such information relating to the registration on the books of the
Company or the Foreign Registrar, if applicable, to execute such certificates
and to make such representations and warranties, as the Depositary may deem
necessary or proper. The Depositary may withhold the delivery or registration of
transfer of any Receipt or the distribution of any dividend or sale or
distribution of rights or of the proceeds thereof or the delivery of any
Deposited Securities until such proof or other information is filed or such
certificates are executed or such representations and warranties made. If
requested in writing, the Depositary shall, as promptly as practicable, provide
the Company, at the expense of the Company, with copies of any such proofs,
certificates or other information it receives pursuant to this Article, unless
prohibited by applicable law. No Share shall be accepted for deposit unless
accompanied by evidence satisfactory to the Depositary that any necessary
approval has been granted by any governmental body in the Cayman Islands or in
Hong Kong which is then performing the function of the regulation of currency
exchange.

7.       CHARGES OF DEPOSITARY.

         The Company agrees to pay the fees, reasonable expenses and
out-of-pocket charges of the Depositary and those of any Registrar only in
accordance with agreements in writing entered into between the Depositary and
the Company from time to time. The Depositary shall present its statement for
such charges and expenses to the Company once every three months. The charges
and expenses of the Custodian are for the sole account of the Depositary.

         The following charges shall be incurred by any party depositing or
withdrawing Shares or by any party surrendering Receipts or to whom Receipts are
issued (including, without limitation, issuance pursuant to a stock dividend or
stock split declared by the Company or an exchange of stock regarding the
Receipts or Deposited Securities or a distribution of Receipts pursuant to
Section 4.3 of the Deposit Agreement), or by Owners, as applicable: (1) taxes,
stamp duty and other governmental charges, (2) such registration fees as may
from time to time be in effect for the registration of transfers of Shares
generally on the Share register of the Company or Foreign Registrar and
applicable to transfers of Shares to or from the name of the Depositary or its
nominee or the Custodian or its nominee on the making of deposits or withdrawals
under the Deposit Agreement, (3) such cable, telex and facsimile transmission
expenses as are expressly provided in the




                                                                     EXHIBIT 4.1


Deposit Agreement, (4) such expenses as are incurred by the Depositary in the
conversion of foreign currency pursuant to Section 4.5 of the Deposit Agreement,
(5) a fee of $5.00 or less per 100 American Depositary Shares (or portion
thereof) for the execution and delivery of Receipts pursuant to Section 2.3, 4.3
or 4.4 of the Deposit Agreement and the surrender of Receipts pursuant to
Section 2.5 or 6.2 of the Deposit Agreement, (6) a fee of $.02 or less per
American Depositary Share (or portion thereof) for any cash distribution made
pursuant to the Deposit Agreement, including, but not limited to Sections 4.1
through 4.4 of the Deposit Agreement, (7) a fee for the distribution of
securities pursuant to Section 4.2 of the Deposit Agreement, such fee being in
an amount equal to the fee for the execution and delivery of American Depositary
Shares referred to above which would have been charged as a result of the
deposit of such securities (for purposes of this clause 7 treating all such
securities as if they were Shares) but which securities are instead distributed
by the Depositary to Owners, (8) a fee of $.02 or less per American Depositary
Share (or portion thereof) for depositary services, which will accrue on the
last day of each calendar year and which will be payable as provided in clause
(9) below; provided, however, that no fee will be assessed under this clause (8)
to the extent a fee of $.02 was charged pursuant to clause (6) above during that
calendar year and (9) any other charge payable by the Depositary, any of the
Depositary's agents, including the Custodian, or the agents of the Depositary's
agents in connection with the servicing of Shares or other Deposited Securities
(which charge shall be assessed against Owners as of the date or dates set by
the Depositary in accordance with Section 4.6 of the Deposit Agreement and shall
be payable at the sole discretion of the Depositary by billing such Owners for
such charge or by deducting such charge from one or more cash dividends or other
cash distributions).

         The Depositary, subject to Section 2.9 of the Deposit Agreement and
Article 8 hereof, may own and deal in any class of securities of the Company and
its affiliates and in Receipts.

8.       PRE-RELEASE OF RECEIPTS.

         The Depositary may issue Receipts against the delivery by the Company
(or any agent of the Company recording Share ownership) of rights to receive
Shares from the Company (or any such agent). No such issue of Receipts will be
deemed a "Pre-Release" that is subject to the restrictions of the following
paragraph.

         Unless requested in writing by the Company to cease doing so, the
Depositary may, notwithstanding Section 2.3 of the Deposit Agreement, execute
and deliver Receipts prior to the receipt of Shares pursuant to Section 2.2 of
the Deposit Agreement ("Pre-Release"). The Depositary may, pursuant to Section
2.5 of the Deposit Agreement, deliver Shares upon the receipt and cancellation
of Receipts which have been Pre-Released, whether or not such cancellation is
prior to the termination of such Pre-Release or the Depositary knows that such
Receipt has been Pre-Released. The Depositary may receive Receipts in lieu of
Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded
or accompanied by a written representation and




                                                                     EXHIBIT 4.1


agreement from the person to whom Receipts are to be delivered (the
"Pre-Releasee") that the Pre-Releasee, or its customer, (i) owns the Shares or
Receipts to be remitted, as the case may be, (ii) assigns all beneficial rights,
title and interest in such Shares or Receipts, as the case may be, to the
Depositary in its capacity as such and for the benefit of the Owners, and (iii)
will not take any action with respect to such Shares or Receipts, as the case
may be, that is inconsistent with the transfer of beneficial ownership
(including, without the consent of the Depositary, disposing of such Shares or
Receipts, as the case may be), other than in satisfaction of such Pre-Release,
(b) at all times fully collateralized with cash, U.S. government securities or
such other collateral as the Depositary determines, in good faith, will provide
substantially similar liquidity and security, (c) terminable by the Depositary
on not more than five (5) business days notice, and (d) subject to such further
indemnities and credit regulations as the Depositary deems appropriate. The
number of Shares not deposited but represented by American Depositary Shares
outstanding at any time as a result of Pre-Releases will not normally exceed
thirty percent (30%) of the Shares deposited hereunder; provided, however, that
the Depositary reserves the right to disregard such limit from time to time as
it deems reasonably appropriate, and may, with the prior written consent of the
Company, change such limit for purposes of general application. The Depositary
will also set Dollar limits with respect to Pre-Release transactions to be
entered into hereunder with any particular Pre-Releasee on a case-by-case basis
as the Depositary deems appropriate. For purposes of enabling the Depositary to
fulfill its obligations to the Owners under the Deposit Agreement, the
collateral referred to in clause (b) above shall be held by the Depositary as
security for the performance of the Pre-Releasee's obligations to the Depositary
in connection with a Pre-Release transaction, including the Pre-Releasee's
obligation to deliver Shares or Receipts upon termination of a Pre-Release
transaction (and shall not, for the avoidance of doubt, constitute Deposited
Securities hereunder).

         The Depositary may retain for its own account any compensation received
by it in connection with the foregoing.

9.       TITLE TO RECEIPTS.

         It is a condition of this Receipt and every successive Owner and
Beneficial Owner of this Receipt by accepting or holding the same consents and
agrees, that title to this Receipt when properly endorsed or accompanied by
proper instruments of transfer, is transferable by delivery with the same effect
as in the case of a negotiable instrument under the laws of New York; provided,
however, that the Depositary, notwithstanding any notice to the contrary, may
treat the person in whose name this Receipt is registered on the books of the
Depositary as the absolute owner hereof for the purpose of determining the
person entitled to distribution of dividends or other distributions or to any
notice provided for in the Deposit Agreement and for all other purposes.

10.      VALIDITY OF RECEIPT.

         This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose, unless this Receipt shall
have been executed by





                                                                     EXHIBIT 4.1


the Depositary by the manual signature of a duly authorized signatory of the
Depositary; provided, however, that such signature may be a facsimile if a
Registrar for the Receipts shall have been appointed, and such Receipts are
countersigned by the manual or facsimile signature of a duly authorized officer
of the Registrar.

11.      REPORTS; INSPECTION OF TRANSFER BOOKS.

         The Company is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934 and, accordingly, files certain reports with the
Securities and Exchange Commission (hereinafter called the "Commission").

         Such reports and communications will be available for inspection and
copying at the public reference facilities maintained by the Commission located
at 450 Fifth Street, N.W., Washington, D.C. 20549.

         The Depositary will make available for inspection by Owners of Receipts
at its Corporate Trust Office any reports and communications, including any
proxy soliciting material, received from the Company which are both (a) received
by the Depositary as the holder of the Deposited Securities and (b) made
generally available to the holders of such Deposited Securities by the Company.
The Depositary shall also, upon written request, send to the Owners of Receipts
copies of such reports when furnished by the Company pursuant to the Deposit
Agreement. Any such reports and communications, including any such proxy
soliciting material, furnished to the Depositary by the Company shall be
furnished in English to the extent such materials are required to be translated
into English pursuant to any regulation of the Commission.

         The Depositary shall keep books at its Corporate Trust Office for the
registration of Receipts and transfers of Receipts which at all reasonable times
shall be open for inspection by the Owners and the Company, provided that such
inspection shall not be for the purpose of communicating with Owners of Receipts
in the interest of a business or object other than the business of the Company
or a matter related to the Deposit Agreement or the Receipts.

12.      DIVIDENDS AND DISTRIBUTIONS.

         Whenever the Depositary shall receive any cash dividend or other cash
distribution on any Deposited Securities, the Depositary shall, if at the time
of receipt thereof any amounts received in a foreign currency can in the
judgment of the Depositary be converted on a reasonable basis into United States
dollars transferable to the United States, and subject to the Deposit Agreement,
convert such dividend or distribution into Dollars and shall distribute the
amount thus received (net of the fees and expenses of the Depositary as provided
in the Deposit Agreement, if applicable) to the Owners of Receipts entitled
thereto, provided, however, that in the event that the Company or the Depositary
shall be required to withhold and does withhold from such cash dividend or such
other cash distribution in respect of any Deposited Securities an amount on
account





                                                                     EXHIBIT 4.1


of taxes, the amount distributed to the Owners of the Receipts evidencing
American Depositary Shares representing such Deposited Securities shall be
reduced accordingly.

         Subject to the provisions of Sections 4.11 and 5.9 of the Deposit
Agreement, whenever the Depositary shall receive any distribution other than a
distribution described in Sections 4.1, 4.3 or 4.4 of the Deposit Agreement, the
Depositary shall cause the securities or property received by it to be
distributed to the Owners of Receipts entitled thereto, after deduction or upon
payment of any fees and expenses of the Depositary or any taxes or other
governmental charges, in any manner that the Depositary may deem equitable and
practicable for accomplishing such distribution; provided, however, that if in
the opinion of the Depositary such distribution cannot be made proportionately
among the Owners of Receipts entitled thereto, or if for any other reason the
Depositary deems such distribution not to be feasible, the Depositary may adopt
such method as it may deem equitable and practicable for the purpose of
effecting such distribution, including, but not limited to, the public or
private sale of the securities or property thus received, or any part thereof,
and the net proceeds of any such sale (net of the fees of the Depositary as
provided in Section 5.9 of the Deposit Agreement) shall be distributed by the
Depositary to the Owners of Receipts entitled thereto as in the case of a
distribution received in cash.

         If any distribution upon any Deposited Securities consists of a
dividend in, or free distribution of, Shares, the Depositary may, and shall if
the Company shall so request, distribute to the Owners of outstanding Receipts
entitled thereto, additional Receipts evidencing an aggregate number of American
Depositary Shares representing the amount of Shares received as such dividend or
free distribution, subject to the terms and conditions of the Deposit Agreement
with respect to the deposit of Shares and the issuance of American Depositary
Shares evidenced by Receipts, including the withholding of any tax or other
governmental charge as provided in Section 4.11 of the Deposit Agreement and the
payment of the fees and expenses of the Depositary as provided in Section 5.9 of
the Deposit Agreement. In lieu of delivering Receipts for fractional American
Depositary Shares in any such case, the Depositary shall sell the amount of
Shares represented by the aggregate of such fractions and distribute the net
proceeds, all in the manner and subject to the conditions set forth in the
Deposit Agreement. If additional Receipts are not so distributed, each American
Depositary Share shall thenceforth also represent the additional Shares
distributed upon the Deposited Securities represented thereby.

         The Company or its agent will remit to the appropriate governmental
agency in the Cayman Islands all amounts withheld and owing to such agency. The
Depositary will forward to the Company or its agent such information from its
records as the Company may reasonably request to enable the Company or its agent
to file necessary reports with governmental agencies, and the Depositary or the
Company or its agent may file any such reports necessary to obtain benefits
under the applicable tax treaties for the Owners of Receipts. In the event that
the Depositary determines that any distribution in property





                                                                     EXHIBIT 4.1


(including Shares and rights to subscribe therefor) is subject to any tax or
other governmental charge which the Depositary is obligated to withhold, the
Depositary may by public or private sale dispose of all or a portion of such
property (including Shares and rights to subscribe therefor) in such amounts and
in such manner as the Depositary deems necessary and practicable to pay any such
taxes or charges and the Depositary shall distribute the net proceeds of any
such sale after deduction of such taxes or charges to the Owners of Receipts
entitled thereto.

13.      CONVERSION OF FOREIGN CURRENCY.

         Whenever the Depositary or the Custodian shall receive foreign
currency, by way of dividends or other distributions or the net proceeds from
the sale of securities, property or rights, and if at the time of the receipt
thereof the foreign currency so received can in the judgment of the Depositary
be converted on a reasonable basis into Dollars and the resulting Dollars
transferred to the United States, the Depositary shall convert or cause to be
converted, by sale or in any other manner that it may determine, such foreign
currency into Dollars, and such Dollars shall be distributed to the Owners
entitled thereto or, if the Depositary shall have distributed any warrants or
other instruments which entitle the holders thereof to such Dollars, then to the
holders of such warrants and/or instruments upon surrender thereof for
cancellation. Such distribution may be made upon an averaged or other
practicable basis without regard to any distinctions among Owners on account of
exchange restrictions, the date of delivery of any Receipt or otherwise and
shall be net of any expenses of conversion into Dollars incurred by the
Depositary as provided in Section 5.9 of the Deposit Agreement.

         If such conversion or distribution can be effected only with the
approval or license of any government or agency thereof, the Depositary shall
file such application for approval or license, if any, as it may deem desirable.

         If at any time the Depositary shall determine that in its judgment any
foreign currency received by the Depositary or the Custodian is not convertible
on a reasonable basis into Dollars transferable to the United States, or if any
approval or license of any government or agency thereof which is required for
such conversion is denied or in the opinion of the Depositary is not obtainable
without excessively burdensome or otherwise unreasonable efforts, or if any such
approval or license is not obtained within a reasonable period as determined by
the Depositary, or if there are foreign exchange controls in place that prohibit
such conversion, the Depositary may distribute the foreign currency (or an
appropriate document evidencing the right to receive such foreign currency)
received by the Depositary to, or in its discretion may hold such foreign
currency uninvested and without liability for interest thereon for the
respective accounts of, the Owners entitled to receive the same.

         If any such conversion of foreign currency, in whole or in part, cannot
be effected for distribution to some of the Owners entitled thereto, the
Depositary may in its discretion make such conversion and distribution in
Dollars to the extent permissible to





                                                                     EXHIBIT 4.1


the Owners entitled thereto and may distribute the balance of the foreign
currency received by the Depositary to, or hold such balance uninvested and
without liability for interest thereon for the respective accounts of, the
Owners entitled thereto.

14.      RIGHTS.

         In the event that the Company shall offer or cause to be offered to the
holders of any Deposited Securities any rights to subscribe for additional
Shares or any rights of any other nature, the Depositary, after consultation
with the Company shall have discretion as to the procedure to be followed in
making such rights available to any Owners or in disposing of such rights on
behalf of any Owners and making the net proceeds available to such Owners or, if
by the terms of such rights offering or for any other reason, the Depositary may
not either make such rights available to any Owners or dispose of such rights
and make the net proceeds available to such Owners, then the Depositary shall
allow the rights to lapse. If at the time of the offering of any rights the
Depositary determines in its discretion that it is lawful and feasible to make
such rights available to all Owners or to certain Owners but not to other
Owners, the Depositary may distribute, to any Owner to whom it determines the
distribution to be lawful and feasible, in proportion to the number of American
Depositary Shares held by such Owner, warrants or other instruments therefor in
such form as it deems appropriate.

         In circumstances in which rights would otherwise not be distributed, if
an Owner of Receipts requests the distribution of warrants or other instruments
in order to exercise the rights allocable to the American Depositary Shares of
such Owner under the Deposit Agreement, the Depositary will make such rights
available to such Owner upon written notice from the Company to the Depositary
that (a) the Company has elected in its sole discretion to permit such rights to
be exercised and (b) such Owner has executed such documents as the Company has
determined in its sole discretion are reasonably required under applicable law.

         If the Depositary has distributed warrants or other instruments for
rights to all or certain Owners, then upon instruction from such an Owner
pursuant to such warrants or other instruments to the Depositary from such Owner
to exercise such rights, upon payment by such Owner to the Depositary for the
account of such Owner of an amount equal to the purchase price of the Shares to
be received upon the exercise of the rights, and upon payment of the fees and
expenses of the Depositary and any other charges as set forth in such warrants
or other instruments, the Depositary shall, on behalf of such Owner, exercise
the rights and purchase the Shares, and the Company shall cause the Shares so
purchased to be delivered to the Depositary on behalf of such Owner. As agent
for such Owner, the Depositary will cause the Shares so purchased to be
deposited pursuant to Section 2.2 of the Deposit Agreement, and shall, pursuant
to Section 2.3 of the Deposit Agreement, execute and deliver Receipts to such
Owner. In the case of a distribution pursuant to the second paragraph of this
Article, such Receipts shall be legended in accordance with applicable U.S.
laws, and shall be subject to the appropriate restrictions on sale, deposit,
cancellation and transfer under such laws.





                                                                     EXHIBIT 4.1


         If the Depositary determines in its discretion that it is not lawful
and feasible to make such rights available to all or certain Owners, it may sell
the rights, warrants or other instruments in proportion to the number of
American Depositary Shares held by the Owners to whom it has determined it may
not lawfully or feasibly make such rights available, and allocate the net
proceeds of such sales (net of the fees and expenses of the Depositary as
provided in Section 5.9 of the Deposit Agreement and all taxes and governmental
charges payable in connection with such rights and subject to the terms and
conditions of the Deposit Agreement) for the account of such Owners otherwise
entitled to such rights, warrants or other instruments, upon an averaged or
other practical basis without regard to any distinctions among such Owners
because of exchange restrictions or the date of delivery of any Receipt or
otherwise.

         The Depositary will not offer rights to Owners unless both the rights
and the securities to which such rights relate are either exempt from
registration under the Securities Act with respect to a distribution to Owners
or are registered under the provisions of the Securities Act; provided, that
nothing in the Deposit Agreement shall create any obligation on the part of the
Company to file a registration statement with respect to such rights or
underlying securities or to endeavor to have such a registration statement
declared effective. If an Owner of Receipts requests distribution of warrants or
other instruments, notwithstanding that there has been no such registration
under such the Securities Act, the Depositary shall not effect such distribution
unless it has received an opinion from recognized counsel in the United States
for the Company upon which the Depositary may rely that such distribution to
such Owner is exempt from such registration; provided, however, the Company
shall have no obligation to cause its counsel to issue such opinion at the
request of such Owner.

         The Depositary shall not be responsible for any failure to determine
that it may be lawful or feasible to make such rights available to Owners in
general or any Owner in particular.

15.      RECORD DATES.

         Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or whenever rights
shall be issued with respect to the Deposited Securities, or whenever for any
reason the Depositary causes a change in the number of Shares that are
represented by each American Depositary Share, or whenever the Depositary shall
receive notice of any meeting of holders of Shares or other Deposited
Securities, or whenever the Depositary shall find it necessary or convenient,
the Depositary shall fix a record date, which date shall be the same date, to
the extent practicable, as the record date for the Deposited Securities or if
different, as close thereto as practicable (a) for the determination of the
Owners of Receipts who shall be (i) entitled to receive such dividend,
distribution or rights or the net proceeds of the sale thereof or (ii) entitled
to give instructions for the exercise of voting rights at any such meeting, or
(b) on or after which each American Depositary Share will represent the





                                                                     EXHIBIT 4.1


changed number of Shares, or (c) for any other matter, subject to the provisions
of the Deposit Agreement.

16.      VOTING OF DEPOSITED SECURITIES.

         Upon receipt of notice of any meeting of holders of Shares or other
Deposited Securities, if requested in writing by the Company, the Depositary
shall, as soon as practicable thereafter, mail to the Owners of Receipts a
notice, the form of which notice shall contain (a) such information as is
contained in such notice of meeting, (b) a statement that the Owners of Receipts
as of the close of business on a specified record date will be entitled, subject
to any applicable provision of Hong Kong and Cayman Islands law and of the
Memorandum and Articles of Association of the Company, to instruct the
Depositary as to the exercise of the voting rights, if any, pertaining to the
amount of Shares or other Deposited Securities represented by their respective
American Depositary Shares and (c) a statement as to the manner in which such
instructions may be given. Upon the written request of an Owner of a Receipt on
such record date, received on or before the date established by the Depositary
for such purpose (the "Instruction Date"), the Depositary shall endeavor, in so
far as practicable to vote or cause to be voted the amount of Shares or other
Deposited Securities represented by the American Depositary Shares evidenced by
such Receipt in accordance with the instructions set forth in such request. The
Depositary shall not vote or attempt to exercise the right to vote that attaches
to the Shares or other Deposited Securities, other than in accordance with such
instructions.

         There can be no assurance that Owners generally or any Owner in
particular will receive the notice described in the preceding paragraph
sufficiently prior to the Instruction Date to ensure that the Depositary will
vote the Shares or Deposited Securities in accordance with the provisions set
forth in the preceding paragraph.

17.      CHANGES AFFECTING DEPOSITED SECURITIES.

         In circumstances where the provisions of Section 4.3 of the Deposit
Agreement do not apply, upon any change in nominal value, change in par value,
split-up, consolidation or any other reclassification of Deposited Securities,
or upon any recapitalization, reorganization, merger or consolidation, or sale
of assets affecting the Company or to which it is a party, any securities which
shall be received by the Depositary or a Custodian in exchange for or in
conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities under the Deposit Agreement, and American Depositary Shares
shall thenceforth represent, in addition to the existing Deposited Securities,
if any, the new Deposited Securities so received in exchange or conversion,
unless additional Receipts are delivered pursuant to the following sentence. In
any such case the Depositary may, and shall at the Company's request, execute
and deliver additional Receipts as in the case of a dividend in Shares, or call
for the surrender of outstanding Receipts to be exchanged for new Receipts
specifically describing such new Deposited Securities.





                                                                     EXHIBIT 4.1


18.      LIABILITY OF THE COMPANY AND DEPOSITARY.

         Neither the Depositary nor the Company nor any of their respective
directors, officers, employees, agents or affiliates shall incur any liability
to any Owner or Beneficial Owner of any Receipt, if by reason of any provision
of any present or future law or regulation of the United States, the People's
Republic of China or any other country, or of any governmental or regulatory
authority or stock exchange, or by reason of any provision, present or future,
of the Memorandum and Articles of Association of the Company, or by reason of
any provision of any Securities issued or distributed by the Company, or any
Offering or distribution thereof or by reason of any act of God or war or
terrorism or other circumstances beyond its control, the Depositary or the
Company shall be prevented, delayed or forbidden from, or be subject to any
civil or criminal penalty on account of, doing or performing any act or thing
which by the terms of the Deposit Agreement or Deposited Securities it is
provided shall be done or performed; nor shall the Depositary or the Company or
any of their respective directors, officers, employees, agents or affiliates
incur any liability to any Owner or Beneficial Owner of a Receipt by reason of
any non-performance or delay, caused as aforesaid, in the performance of any act
or thing which by the terms of the Deposit Agreement it is provided shall or may
be done or performed, or by reason of any exercise of, or failure to exercise,
any discretion provided for in the Deposit Agreement. Where, by the terms of a
distribution pursuant to Sections 4.1, 4.2 or 4.3 of the Deposit Agreement, or
an offering or distribution pursuant to Section 4.4 of the Deposit Agreement, or
for any other reason, such distribution or offering may not be made available to
Owners of Receipts, and the Depositary may not dispose of such distribution or
offering on behalf of such Owners and make the net proceeds available to such
Owners, then the Depositary shall not make such distribution or offering, and
shall allow any rights, if applicable, to lapse in each such case without
liability to the Company or the Depositary.

         Neither the Company nor the Depositary nor any of their officers,
employees, agents or affiliates assumes any obligation or shall be subject to
any liability under the Deposit Agreement to Owners or Beneficial Owners of
Receipts, except that the Company and the Depositary agree to perform their
obligations specifically set forth in the Deposit Agreement without negligence
or bad faith. The Depositary shall not be subject to any liability with respect
to the validity or worth of the Deposited Securities. Neither the Depositary nor
the Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of any Deposited Securities or in
respect of the Receipts, which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
shall be furnished as often as may be required, and the Custodian shall not be
under any obligation whatsoever with respect to such proceedings, the
responsibility of the Custodian being solely to the Depositary. Neither the
Depositary nor the Company shall be liable for any action or nonaction by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Shares for deposit, any Owner or Beneficial Owner of a
Receipt, or any other person believed by it in good faith to be competent to
give such advice or information. The Depositary shall not be liable for any





                                                                     EXHIBIT 4.1


acts or omissions made by a successor depositary whether in connection with a
previous act or omission of the Depositary or in connection with any matter
arising wholly after the removal or resignation of the Depositary, provided that
in connection with the issue out of which such potential liability arises the
Depositary performed its obligations without negligence or bad faith while it
acted as Depositary. The Depositary shall not be responsible for any failure to
carry out any instructions to vote any of the Deposited Securities, or for the
manner in which any such vote is cast or the effect of any such vote, provided
that any such action or nonaction is in good faith. The Company agrees to
indemnify the Depositary, its directors, employees, agents and affiliates and
any Custodian against, and hold each of them harmless from, any liability or
expense (including, but not limited to, the fees and expenses of counsel) which
may arise out of any registration with the Commission of Receipts, American
Depositary Shares or Deposited Securities or the offer or sale thereof in the
United States or out of acts performed or omitted, in accordance with the
provisions of the Deposit Agreement and of the Receipts, as the same may be
amended, modified or supplemented from time to time, (i) by either the
Depositary or a Custodian or their respective directors, employees, agents and
affiliates, except for any liability or expense arising out of the negligence or
bad faith of either of them, or (ii) by the Company or any of its directors,
employees, agents and affiliates. No disclaimer of liability under the
Securities Act of 1933 is intended by any provision of the Deposit Agreement.

19.      RESIGNATION AND REMOVAL OF THE DEPOSITARY.

         The Depositary may at any time resign as Depositary under the Deposit
Agreement by written notice of its election so to do delivered to the Company,
such resignation to take effect upon the appointment of a successor depositary
and its acceptance of such appointment as provided in the Deposit Agreement. The
Depositary may at any time be removed by the Company by 90 days prior written
notice of such removal, which shall become effective upon the later to occur of
the (i) 90th day after delivery of the notice to the Depositary or (ii) the
appointment of a successor depositary and its acceptance of such appointment as
provided in the Deposit Agreement. Whenever the Depositary in its discretion
determines that it is in the best interest of the Owners of Receipts to do so,
it may appoint a substitute or additional custodian or custodians.

20.      AMENDMENT.

         The form of the Receipts and any provisions of the Deposit Agreement
may at any time and from time to time be amended by agreement between the
Company and the Depositary without the consent of Owners and Beneficial Owners
in any respect which they may deem necessary or desirable. Any amendment which
shall impose or increase any fees or charges (other than taxes and other
governmental charges, registration fees, cable, telex or facsimile transmission
costs, delivery costs or other such expenses), or which shall otherwise
prejudice any substantial existing right of Owners of Receipts, shall, however,
not become effective as to outstanding Receipts until the expiration of thirty
(30) days after notice of such amendment shall have been given to the Owners of
outstanding Receipts. Every Owner of a Receipt at the time any amendment so
becomes





                                                                     EXHIBIT 4.1


effective shall be deemed, by continuing to hold such Receipt, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. In no event shall any amendment impair the right of the Owner
of any Receipt to surrender such Receipt and receive therefor the Deposited
Securities represented thereby, except in order to comply with mandatory
provisions of applicable law.

21.      TERMINATION OF DEPOSIT AGREEMENT.

         The Depositary shall at any time at the direction of the Company
terminate the Deposit Agreement by mailing notice of such termination to the
Owners of all Receipts then outstanding at least ninety (90) days prior to the
date fixed in such notice for such termination. The Depositary may likewise
terminate the Deposit Agreement by mailing notice of such termination to the
Company and the Owners of all Receipts then outstanding if at any time ninety
(90) days shall have expired after the Depositary shall have delivered to the
Company a written notice of its election to resign and a successor depositary
shall not have been appointed and accepted its appointment as provided in the
Deposit Agreement. On and after the date of termination, the Owner of a Receipt
will, upon (a) surrender of such Receipt at the Corporate Trust Office of the
Depositary, (b) payment of the fee of the Depositary for the surrender of
Receipts referred to in Section 2.5 of the Deposit Agreement and (c) payment of
any applicable taxes or governmental charges, be entitled to delivery, to him or
upon his order, of the amount of Deposited Securities represented by the
American Depositary Shares evidenced by such Receipt. If any Receipts shall
remain outstanding after the date of termination, the Depositary thereafter
shall discontinue the registration of transfers of Receipts, shall suspend the
distribution of dividends to the Owners thereof, and shall not give any further
notices or perform any further acts under the Deposit Agreement, except that the
Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell rights and other property as
provided in the Deposit Agreement, and shall continue to deliver Deposited
Securities, together with any dividends or other distributions received with
respect thereto and the net proceeds of the sale of any rights or other
property, in exchange for Receipts surrendered to the Depositary (after
deducting, in each case, the fee of the Depositary for the surrender of a
Receipt, any expenses for the account of the Owner of such Receipt in accordance
with the terms and conditions of the Deposit Agreement and any applicable taxes
or governmental charges). At any time after the expiration of one year from the
date of termination, the Depositary may sell the Deposited Securities then held
under the Deposit Agreement and may thereafter hold uninvested the net proceeds
of any such sale, together with any other cash then held by it thereunder,
unsegregated and without liability for interest, for the pro rata benefit of the
Owners of Receipts which have not theretofore been surrendered, such Owners
thereupon becoming general creditors of the Depositary with respect to such net
proceeds. After making such sale, the Depositary shall be discharged from all
obligations under the Deposit Agreement, except for its obligations to the
Company under Section 5.8 of the Deposit Agreement and to account for such net
proceeds and other cash (after deducting, in each case, the fee of the
Depositary for the surrender of a Receipt, any expenses for the account of the
Owner of such Receipt in accordance with the terms and conditions of the





                                                                     EXHIBIT 4.1


Deposit Agreement, and any applicable taxes or governmental charges). Upon the
termination of the Deposit Agreement, the Company shall be discharged from all
obligations under the Deposit Agreement except for its obligations to the
Depositary under Sections 5.8 and 5.9 of the Deposit Agreement.

22.      DISCLOSURE OF INTERESTS.

         Notwithstanding any other provision of this Deposit Agreement, each
Owner and Beneficial Owner agrees to comply with requests from the Company
pursuant to applicable law or the Memorandum and Articles of Association to
provide information, inter alia, as to the capacity in which such Owner or
Beneficial Owner owns American Depositary Shares (and Shares as the case may be)
and regarding the identity of any other person(s) interested in such American
Depositary Shares (and Shares, as the case may be) and the nature of such
interest and various other matters, whether or not they are Owners or Beneficial
Owners at the time of such request. The Depositary agrees to use its reasonable
efforts to forward, upon the reasonable written request of the Company and at
the expense of the Company, any such written request from the Company to the
Owners and to forward, as promptly as practicable, to the Company any such
responses to such requests received by the Depositary. If the Company requests
information from the Depositary, the Custodian or the nominee of either, as the
registered owner of the Shares, the obligations of the Depositary, Custodian or
such nominee, as the case may be, shall be limited to disclosing to the Company
the information contained in the register.

23.      COMPLIANCE WITH U.S. SECURITIES LAWS.

         Notwithstanding anything in the Deposit Agreement or this Receipt to
the contrary, the Company and the Depositary each agrees that it will not
exercise any rights it has under the Deposit Agreement to prevent the withdrawal
or delivery of Deposited Securities in a manner which would violate the U.S.
securities laws, including, but not limited to, Section I.A.(1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act.

24.      SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE OF
         PROCESS.

         The Company hereby (i) irrevocably designates and appoints CT
Corporation System, 111 Eighth Avenue, 13th Floor, New York, New York 10011, in
the State of New York, as the Company's authorized agent upon which process may
be served in any suit or proceeding arising out of or relating to the Shares or
Deposited Securities, the American Depositary Shares, the Receipts or this
Agreement, (ii) consents and submits to the jurisdiction of any state or federal
court in the State of New York in which any such suit or proceeding may be
instituted, and (iii) agrees that service of process upon said authorized agent
shall be deemed in every respect effective service of process upon the Company
in any such suit or proceeding. The Company agrees to deliver, upon the
execution and delivery of the Deposit Agreement, a written acceptance by such
agent of its appointment as such agent. The Company further agrees to take any
and all action, including the filing of any and all such documents and
instruments, as may be necessary





                                                                     EXHIBIT 4.1


to continue such designation and appointment in full force and effect for so
long as any American Depositary Shares or Receipts remain outstanding or this
Agreement remains in force. In the event the Company fails to continue such
designation and appointment in full force and effect, the Company hereby waives
personal service of process upon it and consents that any such service of
process may be made by certified or registered mail, return receipt requested,
directed to the Company at its address last specified for notices hereunder, and
service so made shall be deemed completed five (5) days after the same shall
have been so mailed.

25.      ARBITRATION.

         In the event the Depositary is advised that a judgment of a United
States court may not be recognized, the following provisions shall apply:

         (i) Any controversy, claim or cause of action brought by any party or
parties hereto against any other party or parties hereto arising out of or
relating to the Deposit Agreement shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.

         (ii) The place of the arbitration shall be the City of New York, State
of New York, United States of America, and the language of the arbitration shall
be English.

         (iii) The number of arbitrators shall be three, each of whom shall be
disinterested in the dispute or controversy, shall have no connection with any
party thereto, and shall be an attorney experienced in international securities
transactions. Each party shall appoint one arbitrator and the two arbitrators
shall select a third arbitrator who shall serve as chairperson of the tribunal.
If a dispute, controversy or cause of action shall involve more than two
parties, the parties shall attempt to align themselves in two sides (i.e.,
claimant and respondent), each of which shall appoint one arbitrator as if there
were only two parties to such dispute, controversy or cause of action. If either
or both parties fail to select an arbitrator, or if such alignment (in the event
there is more than two parties) shall not have occurred, within sixty (60)
calendar days after the initiating party serves the arbitration demand or the
two arbitrators fail to select a third arbitrator within sixty (60) calendar
days of the selection of the second arbitrator, the American Arbitration
Association shall appoint the arbitrator or arbitrators in accordance with its
rules. The parties and the American Arbitration Association may appoint the
arbitrators from among the nationals of any country, whether or not a party is a
national of that country.

         (iv) The arbitrators shall have no authority to award damages not
measured by the prevailing party's actual damages and shall have no authority to
award any consequential, special or punitive damages, and may not, in any event,
make any ruling, finding or award that does not conform to the terms and
conditions of the Deposit Agreement.





                                                                     EXHIBIT 4.1


         (v) In the event any third-party action or proceeding is instituted
against the Depositary relating to or arising from any act or failure to act by
the Company, the Company hereby submits to the personal jurisdiction of the
court or administrative agency in which such action or proceeding is brought.





FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto


PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:



- --------------------------------------------------------------------------------
             Please print or typewrite name and address of assignee


- --------------------------------------------------------------------------------
the within American Depositary Receipt and all rights and interests represented
thereby, and hereby irrevocably constitutes and appoints _______________________
attorney, to transfer the same on the books of the within named Depositary with
full power of substitution in the premises.


Dated: _________________________            Signature: _________________________


                    (ASSIGNMENT AND TRANSFER SIGNATURE LINES)

NOTE: The signature to any endorsement hereon must correspond with the name as
written upon the face of this Receipt in every particular, without alteration or
enlargement or any change whatever.

If the endorsement be executed by an attorney, executor, administrator, trustee
or guardian, the person executing the endorsement must give his full title in
such capacity and proper evidence of authority to act in such capacity, if not
on file with the Depositary, must be forwarded with this Receipt.

All endorsements or assignments of Receipts must be guaranteed by a New York
Stock Exchange member firm or member of the Clearing House of the American Stock




                                                                     EXHIBIT 4.1


Exchange Clearing Corporation or by a bank or trust company having an office or
correspondent in the City of New York.


                                                                               .
                                                                               .
                                                                               .

                                                                     Exhibit 4.2



                                     
Name of Company:
CTRIP.COM INTERNATIONAL,                                    CTRIP.COM INTERNATIONAL, LTD.
LTD.                                            (Incorporated under the laws of the Cayman Islands)

                                        Number                                                                       Ordinary Shares
                                        [       ]                                                                          [       ]
Number:
[       ]                                    US$1,000,000 Share Capital divided into 100,000,000 Ordinary Shares of a nominal or
                                        par value of US$0.01 each, THIS IS TO CERTIFY THAT                        [                ]
                                                                                          ------------------------
Ordinary Shares:                                                               is the registered holder of
[       ]                               ---------------------------------------                            -------------------------
                                        [                              ]                               Ordinary Shares in the
                                                                        ------------------------------
                                        above-named Company subject to the memorandum and articles of association thereof.

Issued to:
[                    ]

Dated                                   EXECUTED for and on behalf of the Company on                     20[    ].



Transferred from:

                                                          DIRECTOR
                                                                                --------------------------------------



                                                                     EXHIBIT 5.1



                       (LATHAM & WATKINS LLP LETTERHEAD)


___________, 2003


MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
            Incorporated

  as U.S. Representative of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce Fenner & Smith
            Incorporated

North Tower
World Financial Center
New York, New York 10281-1209

Merrill Lynch Fast East Limited
  as International Representative of the
    several International Underwriters
c/o Merrill Lynch Far East Limited
18/F Asia Pacific Finance Tower
3 Garden Road
Central, Hong Kong

                        Re: Ctrip.com International, Ltd.

Ladies and Gentlemen:

     We have acted as the United States counsel to Ctrip.com International,
Ltd., an exempted company limited by shares registered in the Cayman Islands
(the "Company"), in connection with the sale on the date hereof by the Company
to you and the several underwriters for whom you are acting as representative of
______ American Depositary Shares ("ADSs"), each representing __ ordinary
shares, par value $0.01 per share, of the Company ("Ordinary Shares"), pursuant
to the registration statement on Form F-1 under the Securities Act of 1933, as
amended (the "Act"), filed with the Securities and Exchange Commission (the
"Commission") on November 13, 2003 (File No. 333-110455), as amended to date
(the "F-1 Registration Statement"), the registration statement on Form F-6 under
the Act filed with the Commission on November 13, 2003 (File No. 333-110459), as
amended to date (the "F-6 Registration Statement," and together with the F-1
Registration Statement, the "Registration Statement"), the Prospectus dated
__________, 2003 filed with the Commission pursuant to Rule 424(b) under the Act
(the "Prospectus"), the U.S. underwriting agreement dated __________, 2003 among
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the
several U.S. underwriters named therein (the "U.S. Underwriters"), the selling
shareholders named therein and the Company (the "U.S. Underwriting Agreement")
and the international purchase agreement dated _________, 2003 among Merrill
Lynch Fast East Limited, as representative of the several international





___________, 2003
Page 2

(LATHAM & WATKINS LLP LOGO)


underwriters named therein (the "International Underwriters," and together with
the U.S. Underwriters, the "Underwriters"), the selling shareholders named
therein and the Company (the "International Underwriting Agreement," and
together with the U.S. Underwriting Agreement, the "Underwriting Agreements").
This opinion is being rendered to you pursuant to Section 5(c) of the U.S.
Underwriting Agreement and Section 5(c) of the International Underwriting
Agreement.

     As such counsel, we have examined such matters of fact and questions of law
as we have considered appropriate for purposes of this letter, except where a
statement is qualified as to knowledge or awareness (in which case we have with
your consent made no or limited inquiry as specified below). We have examined,
among other things, the following:

     (a) The Underwriting Agreements, the Registration Statements, the
Prospectus filed by the Company with the Commission;

     (b) The agreements filed as exhibits to the Registration Statements; and

     (c) The Memorandum and Articles of Association of the Company and certain
resolutions of the Board of Directors of the Company.

     As to facts material to the opinions, statements and assumptions expressed
herein, we have, with your consent, relied upon oral or written statements and
representations of officers and other representatives of the Company and others,
including the representations and warranties of the Company in the Underwriting
Agreements, and translations of documents that are not in the English language.
We have not independently verified such factual matters.

     Whenever a statement herein is qualified as to knowledge, awareness, or a
similar phrase, it is intended to indicate that those attorneys in this firm who
have rendered legal services in connection with the transaction referenced above
do not have current actual knowledge of the inaccuracy of such statement.
However, except as otherwise expressly indicated, we have not undertaken any
independent investigation to determine the accuracy of any such statement, and
no inference of any knowledge of any matters pertaining to such statement should
be drawn from our representation of the Company.

     We are opining herein as to the effect on the subject transaction only of
the federal laws of the United States and the internal laws of the State of New
York, and we express no opinion with respect to the applicability thereto, or
the effect thereon, of the laws of any other jurisdiction or as to any matters
of municipal law or the laws of any local agencies within any state. Various
issues concerning the laws of the Cayman Islands, the People's Republic of China
and Hong Kong are addressed in the opinions of Maples and Calder Asia, Commerce
& Finance Law Offices and Boughton Peterson Young Anderson, respectively, all of
which have been separately provided to you, and we express no opinion with
respect to those matters.

     Capitalized terms used herein without definition have the meanings assigned
to them in the U.S. Underwriting Agreement.

     Subject to the foregoing and the other matters set forth herein, it is our
opinion that, as of the date hereof:





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Page 3

(LATHAM & WATKINS LLP LOGO)


     1. Assuming the U.S. Underwriting Agreement and the International
Underwriting Agreement have each been duly authorized, executed and delivered by
the Company in accordance with the laws of the Cayman Islands, the U.S.
Underwriting Agreement and the International Underwriting Agreement each have
been duly executed and delivered by the Company.

     2. The ADSs to be issued and sold by the Company pursuant to the
Underwriting Agreements, when issued to and paid for by you and the other
Underwriters in accordance with the terms of the Underwriting Agreements, will
be validly issued, fully paid and non-assessable.

     3. The execution and delivery of the Underwriting Agreements and the
issuance and sale of the ADSs by the Company to you and the other Underwriters
pursuant to the Underwriting Agreements on the date hereof do not violate any
federal or New York statute, rule or regulation applicable to the Company.

     4. The Registration Statements have become effective under the Act and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statements has been issued under the Act and no proceedings
therefor have been initiated by the Commission; and any required filing of the
Prospectus pursuant to Rule 424 under the Act has been made in accordance with
Rules 424 under the Act.

     5. The Registration Statement, as of the date it was declared effective,
and the Prospectus, as of its date, comply as to form in all material respects
with the requirements for registration statements on Form F-1 and Form F-6 under
the Act and the rules and regulations of the Commission thereunder; it being
understood, however, that we express no opinion with respect to Regulation S-T
or the financial statements, schedules or other financial data included in, or
omitted from, the Registration Statements or the Prospectus. In passing upon the
compliance as to form of the Registration Statements and the Prospectus, we have
assumed that the statements made therein are correct and complete.

     6. The statements set forth in the Prospectus under the captions
"Description of American Depositary Shares" and "Shares Eligible for Future
Sale", insofar as they purport to describe or summarize certain provisions of
the agreements, statutes or regulations referred to therein, are accurate
descriptions or summaries in all material respects.

     7. The statements set forth in the Prospectus under the heading "Taxation
- --United States Federal Income Taxation," insofar as such statements constitute
a summary of the federal tax laws of the United States, constitute accurate
summaries of the matters described therein in all material respects.

     8. No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or body or,
to our knowledge, any federal or New York court is required for the issue and
sale of the ADSs by the Company or the compliance by the Company with all of the
provisions of the Underwriting Agreements, except for the registration under the
Act and the United States Securities Exchange Act of 1934, as amended, of the
ADSs, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the ADSs by the Underwriters as
contemplated in the Underwriting Agreements.





___________, 2003
Page 4

(LATHAM & WATKINS LLP LOGO)


     9. The Company is not an "investment company," as such term is defined in
the Investment Company Act of 1940, as amended.

     10. To our knowledge, there is no action, suite or proceeding pending or
threatened before any United States court or governmental agency, authority or
body or any arbitrator to which the Company is a party or to which any property
of the Company is subject that we believe are likely to have a Material Adverse
Effect, or might be expected to materially and adversely affect the power or
ability of the Company to perform its obligations under the Underwriting
Agreements.

     The primary purpose of our professional engagement was not to establish or
confirm factual matters or financial or quantitative information. Therefore, we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statements or the Prospectus, except to the extent expressly set forth in the
numbered paragraphs 6 and 7 of this letter, and have not made an independent
check or verification thereof except as aforesaid. However, in the course of
acting as counsel to the Company in connection with the preparation by the
Company of the Registration Statements and Prospectus, we reviewed the
Registration Statements and the Prospectus, and participated in conferences and
telephone conversations with officers and other representatives of the Company,
the independent public accountants for the Company, your representatives, and
your counsel, during which conferences and conversations the contents of the
Registration Statements and the Prospectus and related matters were discussed.
We also reviewed and relied upon certain corporate records and documents and
oral and written statements of officers and other representatives of the Company
and others as to the existence and consequence of certain factual and other
matters.

     Based on our participation, review and reliance as described above, we
advise you that no facts came to our attention that caused us to believe that
the Registration Statements, at the respective time they became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date, contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; it being understood that we express no belief with
respect to the financial statements, schedules, or other financial or
statistical data included in, or omitted from, the Registration Statements or
the Prospectus.

     This opinion is rendered only to you as representatives of the several
Underwriters under the Underwriting Agreements and is solely for the benefit of
the Underwriters in connection with the transactions covered hereby. This
opinion may not be relied upon by you for any other purpose, or furnished to,
quoted to, or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent, which may be granted or withheld in
our sole discretion.

     We hereby consent to the use of this opinion in, and the filing hereof as
an Exhibit to, the above-mentioned F-1 Registration Statement and to the
reference to our name under the heading "Taxation" in the prospectus included in
such F-1 Registration Statement. In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the regulations
promulgated thereunder.





___________, 2003
Page 5

(LATHAM & WATKINS LLP LOGO)



                                                     Very truly yours,



                                                                     EXHIBIT 5.2



                                                          ________________, 2003


Dear Sirs,

RE: CTRIP.COM INTERNATIONAL, LTD. (THE "COMPANY")

We have acted as Cayman Islands legal advisers to the Company, a company
incorporated in the Cayman Islands, in connection with the Company's public
offering of [           ] American Depositary Shares ("ADS") representing
[           ] Ordinary Shares of par value US$[           ] (the "SHARES") of
the Company. Such public offering is being underwritten pursuant to an
underwriting agreement dated as of [           ], 2003 between, inter alios, the
Company and the Underwriters (the "UNDERWRITING AGREEMENT"). The ADSs will be
evidenced by American Depositary Receipts issued in accordance with a deposit
agreement (the "DEPOSIT AGREEMENT") dated as of [           ], 2003 between the
Company and The Bank of New York as depositary (the "DEPOSITARY"). This opinion
is being delivered to you pursuant to Section 5(b) of the Underwriting
Agreement.


1    DOCUMENTS REVIEWED

We have reviewed originals, copies, drafts or conformed copies of the following
documents:

1.1  the Certificate of Incorporation dated 3rd March, 2000 and the Amended and
     Restated Memorandum and Articles of Association of the Company as adopted
     on 4th September, 2003 (the "MEMORANDUM AND ARTICLES OF ASSOCIATION");

1.2  the [minutes of the meeting of the Board of Directors of the Company held
     on [           ]] [the written resolutions dated [date]] and [the corporate
     records of the Company maintained at its registered office in the Cayman
     Islands];

1.3  the resolutions of all of the shareholders of the Company passed on
     [           ], 2003;

1.4  a Certificate of Good Standing dated [           ], 2003 issued by the
     Registrar of Companies (the "CERTIFICATE OF GOOD STANDING");

1.5  a certificate from a Director of the Company dated [           ] November,
     2003, a copy of which is annexed hereto (the "DIRECTOR'S CERTIFICATE");

1.6  the Underwriting Agreement;

1.7  the Deposit Agreement;

1.8  [the International Purchase Agreement]; and

1.9  the registration statement on Form F-1 (File No. [           ]) (the
     "REGISTRATION STATEMENT") filed by the Company with the US Securities and
     Exchange Commission





     ("SEC") and declared effective by the SEC on [           ], 2003 including
     the prospectus (the "PROSPECTUS") contained therein.

The documents referred to in paragraphs 1.6 to [1.8] above are collectively
referred to as the "AGREEMENTS". Terms used herein have the same meanings given
in the Underwriting Agreement unless otherwise defined herein.


2    ASSUMPTIONS

The following opinion is given only as to, and based on, circumstances and
matters of fact existing and known to us on the date of this opinion. This
opinion only relates to the laws of the Cayman Islands which are in force on the
date of this opinion. In giving this opinion we have relied (without further
verification) upon the completeness and accuracy of the Director's Certificate
and the Certificate of Good Standing. We have also relied upon the following
assumptions, which we have not independently verified:

2.1  the Agreements have been or will be authorised and duly executed and
     delivered by or on behalf of all relevant parties (other than the Company
     as a matter of Cayman Islands law) in accordance with all relevant laws
     (other than the laws of the Cayman Islands);

2.2  the Agreements are, or will be, legal, valid, binding and enforceable
     against all relevant parties in accordance with their terms under the laws
     of the State of New York and all other relevant laws (other than the laws
     of the Cayman Islands);

2.3  the choice of the laws of the State of New York as the governing law of the
     Agreements has been made in good faith and would be regarded as a valid and
     binding selection which will be upheld by the courts of the State of New
     York as a matter of the laws of the State of New York and all other
     relevant laws (other than the laws of the Cayman Islands);

2.4  copy documents, conformed copies or drafts of documents provided to us are
     true and complete copies of, or in the final forms of, the originals;

2.5  all signatures, initials and seals are genuine;

2.6  the power, authority and legal right of all parties under all relevant laws
     and regulations (other than, with respect to the Company, the laws of the
     Cayman Islands) to enter into, execute, deliver and perform their
     respective obligations under the Agreements;

2.7  All conditions precedent contained in the Agreements have been satisfied or
     duly waived and there has been no breach of the terms of the Agreements at
     the date hereof;

2.8  There is no contractual or other prohibition (other than as may arise by
     virtue of the laws of the Cayman Islands) binding on the Company or on any
     other party prohibiting it from entering into and performing its
     obligations under the Agreements;




2.9  there is nothing under any law (other than the law of the Cayman Islands)
     which would or might affect the opinions hereinafter appearing.
     Specifically, we have made no independent investigation of the laws of the
     State of New York;

2.10 The Company is not a sovereign entity of any state and is not a subsidiary,
     direct or indirect, of any sovereign entity or state;

2.11 The issued shares in the capital of the Company, including those to be
     issued pursuant to the offer contained in the Prospectus, have been fully
     paid up and there are no contractual or other obligations (other than as
     may arise by virtue of the laws of the Cayman Islands) binding on the
     Company or any of the persons to whom such shares have been issued to make
     any further payment or give further consideration in relation thereto.

     A.
3    OPINIONS

The following opinions are given only as to matters of Cayman Islands law and we
have assumed that there is nothing under any other law that would affect or vary
the following opinions. Specifically we have made no investigation of the laws
of New York and we offer no opinion in relation thereto.

Based upon the foregoing and subject to the qualifications set out below and
having regard to such legal considerations as we deem relevant, we are of the
opinion that:

3.1  The Company has been duly incorporated as an exempted company with limited
     liability and is validly existing and in good standing under the laws of
     the Cayman Islands with full corporate power and authority to own its
     property and assets and to carry on its business in accordance with the
     Memorandum and Articles of Association and as described in the Registration
     Statement and to enter into and execute and perform its obligations under
     the Agreements.

3.2  The Company is in good standing with the Registrar of Companies in the
     Cayman Islands.

3.3  The Company has an authorised capital as set forth in the Prospectus, and
     all of the issued shares in the capital of the Company (including the
     Shares when issued and delivered in accordance with the terms of the
     Underwriting Agreement) have been duly and validly authorised and issued,
     are fully paid and non-assessable are not subject to any pre-emptive or
     similar rights under Cayman Islands law or the Memorandum and Articles of
     Association and conform to the description thereof contained in the
     Prospectus.

3.4  The execution and delivery of the Agreements by the Company and the
     performance of its obligations thereunder, the Registration Statement, the
     Prospectus and the filing of the Registration Statement and the Prospectus
     have been duly authorised and approved by all necessary corporate action of
     the Company and the execution and delivery of the Agreements by the Company
     and the performance of its obligations thereunder do not violate, conflict
     with or result in a breach of any of the terms or provisions of its
     Memorandum and Articles of Association or any law, public rule or
     regulation applicable to the Company in the Cayman Islands currently in
     force and do not violate, conflict with




     or result in a breach of any existing order or decree of any governmental
     authority or agency or any official body in the Cayman Islands.

3.5  All the outstanding issued Series A Preferred Shares, Series B Preferred
     Shares and Series C Preferred Shares of the Company (collectively, the
     "PREFERRED SHARES") have been duly authorised and validly issued as fully
     paid and non-assessable and conform to the descriptions thereof contained
     in the Prospectus in all material respects, and all the Ordinary Shares
     issuable upon the mandatory conversion of the Preferred Shares as described
     in the Prospectus have been duly authorised and, prior to or concurrently
     with the Closing, all the Preferred Shares will be converted into Ordinary
     Shares of the Company and all such Ordinary Shares, when entered on the
     register of members as such, will be validly issued as fully paid and
     non-assessable.

3.6  The Agreements have been duly executed and delivered for and on behalf of
     the Company and constitute legal, valid and binding obligations of the
     Company enforceable in the Cayman Islands in accordance with its terms
     except and in so far as such enforcement may be limited as hereinafter set
     forth.

3.7  The Registration Statement has been duly executed by and on behalf of the
     Company.

3.8  No authorisations, consents, orders, permissions or approvals are required
     from any governmental authorities or agencies or other official bodies in
     the Cayman Islands and no notice to or other filing with or action by any
     Cayman Islands governmental authority or regulatory body is required in
     connection with:

     (1)  the execution and delivery of the Agreements;

     (2)  the performance of any obligation under the Agreements; and

     (3)  the payment of any amount under the Agreements.

3.9  It is not necessary to ensure the legality, validity, enforceability or
     admissibility in evidence of the Agreements that any document be filed,
     recorded or enrolled with any governmental department, agency or other
     authority in the Cayman Islands.

3.10 The statements in the Prospectus under "Dividend Policy", "Enforceability
     of Civil Liabilities", "Management", "Description of Share Capital",
     Principal Shareholders", Capitalization", and "Taxation" and the statements
     in the Registration Statement under Item 14, insofar as such statements
     constitute summaries of the legal matters, documents or proceedings
     referred to therein, in each case to the extent, and only to the extent,
     governed by the laws of the Cayman Islands, fairly present the information
     and summarise the matters referred to therein.

3.11 No stamp duties or other similar taxes or charges are payable under the
     laws of the Cayman Islands in respect of:

     3.11.1 the execution or delivery of the Agreements or the performance by
            any of the parties of their respective obligations or enforcement of
            any of the Agreements unless they are executed in or thereafter
            brought within the jurisdiction of the Cayman Islands (e.g. for the
            purposes of enforcement) in




            which case stamp duty of CI$2.00 (US$2.44) for each of the
            Agreements will be payable; or

     3.11.2 the issuance and sale of the Shares by the Company or the sale by
            Selling Shareholders of their respective shares pursuant to the
            terms of the Underwriting Agreement; or

     3.11.3 the entering of the Custodian as the registered holder of the
            Shares; or

     3.11.4 the deposit with the Custodian on behalf of the Depository of the
            Shares against the Issuance of ADSs for the account of the
            Underwriters on the date hereof; or

     3.11.5 the sale and delivery outside of the Cayman Islands by the
            Underwriters of the ADSs to the initial purchasers thereof.

3.12 There are currently no taxes or other charges or deductions payable (by
     withholding or otherwise) to the Cayman Islands Government or any taxing
     authority thereof on or by virtue of:

     3.12.1 the execution, delivery, performance or enforcement of the
            Agreements;

     3.12.2 any payment of any nature to be made by the Company under any of the
            Agreements;

     3.12.3 the issuance and sale of the Shares by the Company; or

     3.12.4 the payment of dividends and other distributions declared and
            payable on the Shares.

     The Cayman Islands currently have no income, corporate or capital gains tax
     and no estate duty, inheritance tax or gift tax.

3.13 The choice of the laws of New York to govern the Agreements will be upheld
     as a valid choice of law under the laws of the Cayman Islands and the
     courts of the Cayman Islands would uphold such choice of law in a suit on
     the Agreements brought in the courts of the Cayman Islands, assuming it is
     so pleaded. An action against the Company in the Cayman Islands under the
     Agreements could be instituted in the Grand Court, which has jurisdiction
     over the Company, without first having to obtain a judgment in respect of
     the Agreements in a court of New York or any other relevant jurisdiction.
     In the event of any proceedings being brought in the Cayman Islands courts
     in respect of a monetary obligation expressed to be payable in a currency
     other than Cayman Islands dollars, a Cayman Islands court would give
     judgment expressed as an order to pay such currency or its Cayman Islands
     dollar equivalent at the time of payment or enforcement of the judgment.

3.14 The submission to the jurisdiction of the courts sitting in New York and
     the appointment of ASAT Inc. to accept service of process in such
     jurisdiction, pursuant to the Agreements, is legal, valid and binding on
     the Company.




3.15 Although there is no statutory enforcement in the Cayman Islands of
     judgments obtained in New York, the courts of the Cayman Islands will
     recognise and enforce a judgment of a foreign court of competent
     jurisdiction in respect of any legal suit or proceeding arising out of or
     relating to the Agreements without retrial on the merits based on the
     principle that a judgment of a competent foreign court imposes upon the
     judgment debtor an obligation to pay the sum for which judgment has been
     given provided that such judgment is final and conclusive, for a liquidated
     sum, not in respect of taxes or a fine or penalty, is not inconsistent with
     a Cayman Islands judgment in respect of the same matter, and was not
     obtained in a manner and is not of a kind the enforcement of which is
     contrary to the public policy of the Cayman Islands. A Cayman Islands court
     may stay proceedings if concurrent proceedings are being brought elsewhere.
     A foreign judgment may be final and conclusive even if subject to appeal.
     However, if appealable, a Cayman Islands court may stay enforcement until
     such appeal has been heard.

3.16 Based solely on our inspection of the Register of Writs and Other
     Originating process in the Grand Court of the Cayman Islands from the date
     of incorporation of the Company there were no actions or petitions pending
     against the Company in the courts of the Cayman Islands as at close of
     business in the Cayman Islands on [ ], 2003. A search at the Companies
     Registry in the Cayman Islands would not reveal any order or resolution for
     the winding up of the Company because under Cayman Islands law the records
     kept by the Registrar of Companies are not documents of public record. The
     enquiries referred to above which we have made at the Grand Court of the
     Cayman Islands have revealed no record of the presentation of any winding
     up petition in respect of the Company. We assume that there has been no
     change in this position since the date on which the enquiries were made.

3.17 There is no exchange control legislation under Cayman Islands law and
     accordingly there are no exchange control regulations imposed under Cayman
     Islands law.

3.18 The Company is not entitled to any immunity under the laws of the Cayman
     Islands whether characterized as sovereign immunity or otherwise for any
     legal proceedings in the Cayman Islands to enforce or to collect upon the
     Agreements.

3.19 So far as the law of the Cayman Islands is concerned, each of the
     Agreements is in proper form under the laws of the Cayman Islands for the
     enforcement thereof against the Selling Shareholder subject in so far as
     such enforcement may be limited as hereinafter set forth and in particular
     we would draw your attention to paragraph [3.11] relating to stamp duty.

3.20 We have reviewed the register of members of the Company. As of the date
     hereof there are no entries or notations indicating any third party
     interests including any security interest on the register of members of the
     Company.

3.21 It is not necessary to ensure the legality, validity, enforceability or
     admissibility in evidence of the Agreements that any document be filed,
     recorded or enrolled with any governmental authority or agency or any
     official body in the Cayman Islands.

3.22 The Underwriters will not be treated as resident, domiciled or carrying on
     or transacting business or subject to taxation in the Cayman Islands or in
     violation of any law thereof solely by reason of the negotiation,
     preparation or execution of the




     Agreements or the entering into of or the exercise of their rights or the
     performance of their obligations under the Agreements.

3.23 The Underwriters will not be required to be licensed, qualified or
     otherwise entitled to carry on business in the Cayman Islands in order to
     enforce their rights under, or as a consequence of the execution, delivery
     and performance of the Agreements.


4    QUALIFICATIONS

The opinions expressed above are subject to the following qualifications:

4.1  The term "ENFORCEABLE" as used above means that the obligations assumed by
     the Company under the Agreements are of a type which the courts of the
     Cayman Islands will enforce. It does not mean that those obligations will
     necessarily be enforced in all circumstances in accordance with their
     terms. In particular:

     4.1.1  enforcement may be limited by bankruptcy, insolvency, liquidation,
            reorganisation, readjustment of debts or moratorium or other laws of
            general application relating to or affecting the rights of
            creditors;

     4.1.2  enforcement may be limited by general principles of equity. For
            example, equitable remedies such as specific performance may not be
            available, inter alia, where damages are considered to be an
            adequate remedy;

     4.1.3  some claims may become barred under the statutes of limitation or
            may be or become subject to defenses of set-off, counterclaim,
            estoppel and similar defenses;

     4.1.4  where obligations are to be performed in a jurisdiction outside the
            Cayman Islands, they may not be enforceable in the Cayman Islands to
            the extent that performance would be illegal under the laws of that
            jurisdiction;

     4.1.5  the Cayman Islands court has jurisdiction to give judgment in the
            currency of the relevant obligation and statutory rates of interest
            payable upon judgments will vary according to the currency of the
            judgment. If the Company becomes insolvent and is made subject to a
            liquidation proceeding, the Cayman Islands court will require all
            debts to be proved in a common currency, which is likely to be the
            "functional currency" of the Company determined in accordance with
            applicable accounting principles. Currency indemnity provisions have
            not been tested, so far as we are aware, in the courts of the Cayman
            Islands;

     4.1.6  obligations to make payments that may be regarded as penalties will
            not be enforceable;

     4.1.7  the courts of the Cayman Islands may decline to exercise
            jurisdiction in relation to substantive proceedings brought under or
            in relation to the Agreements in matters where they determine that
            such proceedings may be tried in a more appropriate forum;




     4.1.8  The irrevocable appointment of an agent for service of process may,
            as between the appointor and the agent, be revoked by the appointor
            unless given to secure (i) a proprietary interest of the agent or
            (ii) the performance of an obligation owed to the agent;

     4.1.9  Based on principles of privity of contract, any indemnity or other
            provision of the Agreements (not being in the form of a deed) which
            is expressed to be in favour of persons who are not parties to the
            Agreements may not be enforceable by such persons in the absence of
            a trust in their favour;

     4.1.10 Whilst parties to an agreement may agree inter se that respective
            rights and obligations take effect "as of" a date prior to the date
            of execution and delivery, the rights of third parties, to the
            extent that the same may be available thereunder, only take effect
            from the date of actual execution and delivery;

     4.1.11 Under The Companies Law (2003 Revision) of the Cayman Islands, the
            register of members of a Cayman Islands company is by statute
            regarded as prima facie evidence of any matters which The Companies
            Law (2003 Revision) directs or authorises to be inserted therein. A
            third party interest including a security interest in the shares of
            the Company in question would not appear. An entry in the register
            of members may be subject to a court order for rectification (for
            example, in the event of fraud or manifest error); and

     4.1.12 a company cannot, by agreement or in its articles of association,
            restrict the exercise of a statutory power and there exists doubt as
            to enforceability of any provision in the Agreements whereby the
            Company covenants not to exercise powers specifically given to its
            shareholders by The Companies Law (2003 Revision) of the Cayman
            Islands, including, without limitation, the power to increase its
            authorised share capital, amend its memorandum and articles of
            association, or present a petition to a Cayman Islands court for an
            order to wind up the Company.

4.2  As discussed above, Cayman Islands stamp duty may be payable if the
     original Agreements are brought to or executed in the Cayman Islands.

4.3  To maintain the Company in good standing under the laws of the Cayman
     Islands, annual filing fees must be paid and returns made to the Registrar
     of Companies.

4.4  The obligations of the Company may be subject to restrictions pursuant to
     United Nations sanctions as implemented under the laws of the Cayman
     Islands.

4.5  A certificate, determination, calculation or designation of any party to
     the Agreements as to any matter provided therein might be held by a Cayman
     Islands court not to be conclusive final and binding if, for example, it
     could be shown to have an unreasonable or arbitrary basis, or in the event
     of manifest error.

4.6  In principle a Cayman Islands court will award costs and disbursements in
     litigation in accordance with the relevant contractual provisions but there
     remains some uncertainty




     as to the way in which the rules of the Grand Court will be applied in
     practice. Whilst it is clear that costs incurred prior to judgment can be
     recovered in accordance with the contract, it is likely that post-judgment
     costs (to the extent recoverable at all) will be subject to taxation in
     accordance with Grand Court Rules Order 62.

4.7  We reserve our opinion as to the extent to which a Cayman Islands court
     would, in the event of any relevant illegality, sever the offending
     provisions and enforce the remainder of the transaction of which such
     provisions form a part, notwithstanding any express provisions in this
     regard.

4.8  We make no comment with regard to the references to foreign statutes in the
     Agreements.

We express no view as to the commercial terms of the Agreements or whether such
terms represent the intentions of the parties and make no comment with regard to
the representations which may be made by the Company.

This opinion may be relied upon by the addressees only. It may not be relied
upon by any other person except with our prior written consent.

We hereby consent to the use of this opinion in, and the filing hereof as an
Exhibit to, the above-mentioned Registration Statement and to the reference to
our name under the headings "Enforceability of Civil Liabilities" and "Taxation"
in the prospectus included in such Registration Statement. In giving such
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the regulations promulgated thereunder.


Yours faithfully,



MAPLES and CALDER Asia


                                                                    Exhibit 23.1



                       CONSENT OF INDEPENDENT ACCOUNTANTS

     We hereby consent to the use in this Registration Statement on Form F-1 of
our reports dated September 19, 2003 and October 30, 2003 relating to the
financial statements of Ctrip.com International Ltd., which appears in such
Registration Statement. We also consent to the reference to us under the
headings "Summary Consolidated Financial Data", "Selected Consolidated Financial
Data" and "Experts" in such Registration Statement.




/s/ PricewaterhouseCoopers
Shanghai, People's Republic of China
November 24, 2003


                                                                    EXHIBIT 99.1



                                     [LOGO]

                         COMMERCE & FINANCE LAW OFFICES
                714 Huapu International Plaza 19 Chaowai Avenue,
               Chaoyang District, Beijing, PRC; Postcode: 100020
    Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203
      E-mail Address: beijing@tongshang.com Website: www.tongshang.com.cn

                                12 November, 2003

To:      Ctrip.com International, Ltd.
         3F, Building 63-64
         No. 421 Hong Cao Road
         Shanghai 200233, PRC


                           RE: SHARE PLEDGE AGREEMENT

Ladies and Gentlemen,

         We are lawyers qualified in the People's Republic of China ("PRC") and
are qualified to issue an opinion on the laws of the PRC.

         We have acted as PRC counsel for Ctrip.com International, Ltd. (the
"Company"), a company incorporated under the laws of the Cayman Islands, in
relation to the Company's proposed initial public offering of American
depositary shares ("ADSs") representing its ordinary shares and listing of ADSs
on the NASDAQ. We have been requested to give this opinion on the legality and
enforceability of the following Share Pledge Agreements:

         1. Share pledge agreements entered into by and between Individual
Shareholders of Shanghai Ctrip Commerce Co., Ltd. ("Ctrip Commerce") and Ctrip
Computer Technology ( Shanghai ) Co., Ltd. ("Ctrip Computer"). According to the
agreements, the Shareholders of Ctrip Commerce have created pledge over their
equity interest in Ctrip Commerce in favor of Ctrip Computer to guarantee the
performance of Ctrip Commerce's obligation under the Exclusive Technology
Consulting and Services Agreement entered into by and between Ctrip Commerce and
Ctrip Computer. The equity pledge can be enforced by Ctrip Computer in the event
of any breach or non-payment by the Ctrip Commerce.

         2. Share pledge agreements entered into by and between Individual
Shareholders of Beijing Chenhao Xinye Air Ticketing Service Co., Ltd. ("Beijing
Chen Hao") and Ctrip Computer. According to the agreements, the Shareholders of
Beijing Chen Hao have created pledge over their equity interest in Beijing Chen
Hao in favor of Ctrip Computer to guarantee the performance of Beijing Chen
Hao's obligation under the


                                       1

                                                                    EXHIBIT 99.1


Exclusive Technical Consulting and Services Agreement
entered into by and between Beijing Chen Hao and Ctrip Computer. The equity
pledge can be enforced by Ctrip Computer in the event of any breach or
non-payment by the Beijing Chen Hao.

         3. Share pledge agreements entered into by and between Individual
Shareholders of Guangzhou Guangcheng Commercial Service Co., Ltd. ("Guangzhou
Guang Cheng") and Ctrip Computer. According to the agreements, the Shareholders
of Guangzhou Guang Cheng have created pledge over their equity interest in
Guangzhou Guang Cheng in favor of Ctrip Computer to guarantee the performance of
Guangzhou Guang Cheng' s obligation under the Exclusive Technology Services
Agreement entered into by and between Guangzhou Guang Cheng and Ctrip Computer.
The equity pledge can be enforced by Ctrip Computer in the event of any breach
or non-payment by the Guangzhou Guang Cheng.

         4. Share pledge agreement entered into by and between Ctrip Commerce
and Ctrip Computer. According to the agreement, Ctrip Commerce has created
pledge over its equity interest in Shanghai Huacheng Southwest Travel Agency
Co., Ltd. ("Shanghai Huacheng") in favor of Ctrip Computer to guarantee the
performance of Shanghai Huacheng's obligation under the Exclusive Technical
Consulting and Services Agreement entered into by and between Shanghai Huacheng
and Ctrip Computer. The equity pledge can be enforced by Ctrip Computer in the
event of any breach or non-payment by the Shanghai Huacheng.

         5. Share pledge agreement entered into by and between Mr. Fan Min and
Ctrip Computer. According to the agreement, Mr. Fan Min has created pledge over
his equity interest in Shanghai Cuiming International Travel Agency Co., Ltd.
("Shanghai Cuiming") in favor of Ctrip Computer to guarantee the performance of
Shanghai Cuiming' s obligation under the Exclusive Technical Consulting and
Services Agreement entered into by and between Shanghai Cuiming and Ctrip
Computer. The equity pledge can be enforced by Ctrip Computer in the event of
any breach or non-payment by the Shanghai Cuiming.

         Based on the provisions of the said equity pledge agreements and
relevant laws and regulations, we are of the opinion that:

         1. Each of the share pledge agreements has been signed by the relevant
parties and is valid and enforceable under the laws of the PRC;

         2. According to PRC Security Law, pledge can be created over the shares
which are transferable. If the debtor fails to perform his obligation, the
pledgee shall be entitled to priority in receiving payment by converting the
pledged shares into value or proceeds from the auction or sale of such shares in
accordance with the law and agreement;

         3. In the event that pledge is triggered, under the laws of the PRC the
shares under the pledge can be converted into value or sold in order for the
pledgee to be entitled to priority in receiving proceeds from the auction or
sale of such shares.



                                       2

                                                                    EXHIBIT 99.1


Accordingly, when the pledge is enforced, the pledgee can (i) sell the shares
and retain the proceeds form such sale, or (ii) require the pledgor to transfer
the shares without consideration to the Chinese citizen(s) appointed by the
pledgee. The Chinese citizen(s) receiving the shares will be required to enter
into same kind of arrangement with the pledgee and Company.

         This opinion relates to the laws of the PRC (other than the laws of the
Hong Kong Special Administrative Region) in effect on the date hereof.


         We hereby consent to the use of this opinion in, and the filing hereof
as an Exhibit to, the above-mentioned Registration Statement and to the
reference to our name under the headings "Risk Factors," "Enforceability of
Civil Liabilities," "Chinese Government Regulations" and "Related Party
Transactions" in the prospectus included in such Registration Statement.  In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the regulations promulgated thereunder.


                                                  Yours faithfully,



                                                  Commerce & Finance Law Offices





                                       3



                                                                    EXHIBIT 99.2


                                     [LOGO]

                         COMMERCE & FINANCE LAW OFFICES
                714 Huapu International Plaza 19 Chaowai Avenue,
               Chaoyang District, Beijing, PRC; Postcode: 100020
    Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203
      E-mail Address: beijing@tongshang.com Website: www.tongshang.com.cn

                               [ ] November, 2003

To:      Ctrip.com International, Ltd.
         3F, Building 63-64
         No. 421 Hong Cao Road
         Shanghai 200233, PRC

                      RE: SHANGHAI CTRIP COMMERCE CO., LTD.

Ladies and Gentlemen,

     We are lawyers qualified in the People's Republic of China ("PRC") and are
qualified to issue an opinion on the laws of the PRC.

     We have acted as PRC counsel for Ctrip.com International, Ltd. (the
"Company"), a company incorporated under the laws of the Cayman Islands, in
relation to the Company's proposed initial public offering of American
depositary shares ("ADSs") representing its ordinary shares and listing of ADSs
on the NASDAQ. We have been requested to give this opinion on the legality and
validity of the following arrangement ("Arrangement") under the relevant
agreements ("Agreements") among Ctrip.com ( Hong Kong ) Limited, shareholders of
Shanghai Ctrip Commerce Co., Ltd. and Ctrip Computer Technology (Shanghai) Co.,
Ltd. ("WOFE"):

     1. Loans ("Loan Arrangement") respectively to Fan Min and Ji Qi, two
ultimate shareholders ("Ultimate Shareholders") of Shanghai Ctrip Commerce Co.,
Ltd. ("Service Company").

     1.1 Under the loan agreements entered into respectively by and between
Ctrip.com ( Hong Kong ) Limited, an affiliate ("Affiliate") of the Company, and
each of the Ultimate Shareholders, the Affiliate advanced necessary funds to
each of the Ultimate Shareholders for investment into the Service Company.

     1.2 The term of such Loan Agreements is 10 years and can be extended with
both parties' consents. The Ultimate Shareholders can only repay the loan by the
way of transferring their ownership in the Service Company to the entity or
entities agreed by the Affiliate.

     1.3 The loans provided to each of the Ultimate Shareholders shall
respectively become due wholly and all of the equity interest must be
transferred by such Ultimate



                                       1


                                                                    EXHIBIT 99.2

Shareholders to the entity or entities agreed by the Affiliate when one of the
following events occur:

     o    Such Ultimate Shareholders dies or becomes mentally disable;

     o    Fan Min is no long employed by the Affiliate or an affiliate of the
          Affiliate, or Ji Qi is no long a director of the Affiliate or an
          affiliate of the Affiliate;

     o    Any one of the Ultimate Shareholders is involved in criminal
          activities;

     o    Any one of the Ultimate Shareholders is subject to a claim by any
          third party for an amount in excess of RMB500,000; or

     o    Foreign investors are permitted to invest in the business of
          value-added telecommunication, and the relevant authorities start to
          approve such business in accordance with the applicable laws of PRC,
          and Affiliate decides to execute the option.

     1.4 No interest will accrue on these loans. However, the Affiliate will be
entitled to any proceeds resulting from the sale by these Ultimate Shareholders
of their equity interests in the Service Company.

     2. Exclusive purchase arrangement respectively to the Ultimate Shareholders
of Service Company.

     2.1 Under the said exclusive purchase agreements entered into respectively
by and among the Affiliate, each of the Ultimate Shareholders and the Service
Company, the Affiliate have an exclusive option to purchase from each of the
Ultimate Shareholders all of his or her interest in the Service Company when
permitted by PRC law.

     2.2 Under the option agreements, the Service Company agree not to take any
of the following actions without prior written consent from the Affiliate or
WOFE:

     o    alter its articles of association or registered capital;

     o    sell or in any way transfer its assets, business, receivables or
          rights or to create any encumbrances thereon;

     o    take up or assume any debt (except those arising in the normal course
          of business or having been disclosed to the Affiliate);

     o    enter in to any transaction or contract of value exceeding RMB [ ]
          (except those executed in the normal course of business);

     o    grant any loan;

     o    enter into any merger, consolidation, acquisition or investment
          agreement; or

     o    distribute any dividend to shareholders unless requested by the
          Affiliate.

     2.3 Under the option agreements, the Ultimate Shareholders agree not to
take any of the following actions without prior written consent from the
Affiliate or WOFE:



                                       2


                                                                    EXHIBIT 99.2

     o    sell or in any way dispose of or create any encumbrances on his or her
          interest in the Service Company (except for the pledge of shares in
          favor of WOFE);

     o    pass any resolution relating to the sale, transfer or pledge of their
          shares of the Service Company (except for the pledge of shares in
          favor of WOFE); or

     o    pass any resolution relating to a merger or consolidation of the
          Service Company or any acquisition by, or investment in, any business
          by the Service Company.

     3. Economic relationships and contractual arrangements between WOFE, the
Service Company and the Ultimate Shareholders

     WOFE wholly owned by the Affiliate enters into following agreements and
arrangements ("Contractual Arrangements") with the Service Company/ the Ultimate
Shareholders:

     3.1 Exclusive technology consulting and services agreement ("Exclusive
Technology Services Agreement") entered into by and between WOFE and the Service
Company. According to the Exclusive Technology Services Agreement, WOFE will
provide technology-consulting services to the Service Company for a fixed fee.

     3.2 Share pledge agreement ("Share Pledge Agreement") entered into by and
between WOFE and the Ultimate Shareholders. According to the Share Pledge
Agreement, the Ultimate Shareholder will pledge their equity interest in the
Service Company to WOFE to guarantee the performance of the Service Company
under the Exclusive Technology Services Agreement. The share pledge may be
enforced by WOFE in the event of any breach or non-payment by the Service
Company.

     3.3 Trademark license agreement ("Trademark Agreement") entered into by and
between WOFE and the Service Company. According to the Trademark License
Agreement, WOFE license to Service Company a non-exclusive right to use certain
trademarks in return for a license fee, and WOFE has the exclusive right to
exempt the obligation of the Service Company to pay the license fee at its own
discretion

     3.4 Domain name license agreement ("Domain Name License Agreement") entered
into by and between WOFE and the Service Company. According to the Domain Name
License Agreement, WOFE license to the Service Company a non-exclusive right to
use ctrip.com.cn domain names in return for a license fee, and WOFE has the
exclusive right to exempt the obligation of the Service Company to pay the
license fee at its own discretion.

     3.5 Software license agreement ("Software License Agreement") entered into
by and between WOFE and the Service Company. According to the Software License
Agreement, WOFE license to the Service Company a non-exclusive right to use
certain



                                       3


                                                                    EXHIBIT 99.2

softwares in return for a license fee, and WOFE has the exclusive right to
exempt the obligation of the Service Company to pay the license fee at its own
discretion.

     3.6 Webpage copyright license agreement ("Webpage Copyright License
Agreement") entered into by and between WOFE and the Service Company. According
to the Webpage Copyright License Agreement, WOFE license to the Service Company
a non-exclusive right to use the WOFE' s webpages copyright in return for a
license fee, and WOFE has the exclusive right to exempt the obligation of the
Service Company to pay the license fee at its own discretion.

     3.7 Business operating agreement ("Business Operating Agreement") entered
into by and among WOFE, the Service Company and the Ultimate Shareholders.
According to the Business Operating Agreement,

     o    in order for the Service Company to obtain bank financing, WOFE agrees
          to provide a guarantee for the payment obligations of the Service
          Company when it is required by any of third party.

     o    the Service Company must appoint as Chief Executive Officer, Chief
          Financial Officer and other high-ranking officers, individuals that
          are recommended by the WOFE.

     o    the Service Company cannot engage in any activity that could
          substantially affect its assets, liabilities, equity or operations,
          such as incurring any debt, purchasing or selling any assets, granting
          any third party a security interest in its property or assigning any
          of its contracts to a third party, without the prior written approval
          of the WOFE.

     3.8 Power of Attorney ("Power of Attorney") issued by the Ultimate
Shareholders. According to the Power of Attorney, the Ultimate Shareholders have
given irrevocable proxies to Neil Shen, an employee of the WOFE, to vote on all
corporate matters of Service Company, including the sale and transfer of the
shareholders' interest in Service Company. WOFE can replace this employee at any
time with any other employee of WOFE.

     3.9 Co-operation agreement ("Co-operation agreement") entered into by and
between WOFE and the Service Company. According to the Co-operation Agreement,
the Service Company will provide all Internet content providing services
required by WOFE for a fixed fee.

     Based on the foregoing and our review of the relevant documents, we are of
the opinion that:

     1. WOFE has been duly incorporated and is validly existing as a wholly
foreign owned enterprise with legal person status in good standing under the
laws of the PRC. All of the registered capital of WOFE has been fully paid and
is owned by the Affiliate directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.



                                       4


                                                                    EXHIBIT 99.2

     2. The Service Company has been duly incorporated and is validly existing
as a privately owned enterprise with legal person status in good standing under
the laws of the PRC. All of the registered capital of the Service Company has
been fully paid and, to the best of our knowledge after due inquiry, 49% and 51%
equity interest in the Service Company are respectively owned by Mr. Fan Min and
Mr. Ji Oi, each directly, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except the pledge created under the
Contractual Arrangements.

     3. Each of WOFE and the Service Company has legal right, power and
authority (corporate and other) to own, lease and operate its properties and to
conduct its business as described in their business licenses and to enter into
and perform its obligations under the Contractual Arrangements.

     4. Each agreement related to the Contractual Arrangements, to which WOFE
and Service Company are the parties has been duly authorized, executed and
delivered by such WOFE and Service Company, and on the performance of which will
not require any approvals, consents, etc other than the ones that are clearly
obtained or waived, is in proper legal form under the laws of the PRC for the
enforcement thereof against the parties thereto with no conflict or violation
with PRC laws or regulations, and constitutes a valid and legally binding
obligation of the parties thereto, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights
generally and to general equity principles.

     5. Each of agreements related to the Loan Arrangement is in proper legal
form under the laws of the PRC for the enforcement thereof against each of
Ultimate Shareholders and the Affiliate with no conflict or violation with PRC
laws or regulations and, assuming due authorization, execution and delivery by
the Affiliate, and due approval, consent for the performance of agreements
obtained or waived, constitutes a valid and legally binding obligation of each
of Ultimate Shareholders and the Affiliate under the PRC law, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.

     This opinion relates to the laws of the PRC (other than the laws of the
Hong Kong Special Administrative Region) in effect on the date hereof.


         We hereby consent to the use of this opinion in, and the filing hereof
as an Exhibit to, the above-mentioned Registration Statement and to the
reference to our name under the headings "Risk Factors," "Enforceability of
Civil Liabilities," "Chinese Government Regulations" and "Related Party
Transactions" in the prospectus included in such Registration Statement.  In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the regulations promulgated thereunder.



                                   Yours faithfully,



                                   Commerce & Finance Law Offices



                                       5




                                                                    EXHIBIT 99.3

                                     [LOGO]

                         COMMERCE & FINANCE LAW OFFICES
                714 Huapu International Plaza 19 Chaowai Avenue,
               Chaoyang District, Beijing, PRC; Postcode: 100020
    Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203
      E-mail Address: beijing@tongshang.com Website: www.tongshang.com.cn

                               [ ] November, 2003

To:      Ctrip.com International, Ltd.
         3F, Building 63-64
         No. 421 Hong Cao Road
         Shanghai 200233, PRC




             RE: SHANGHAI HUACHENG SOUTHWEST TRAVEL AGENCY CO., LTD.

Ladies and Gentlemen,

         We are lawyers qualified in the People's Republic of China ("PRC") and
are qualified to issue an opinion on the laws of the PRC.

         We have acted as PRC counsel for Ctrip.com International, Ltd. (the
"Company"), a company incorporated under the laws of the Cayman Islands, in
relation to the Company's proposed initial public offering of American
depositary shares ("ADSs") representing its ordinary shares and listing of ADSs
on the NASDAQ. We have been requested to give this opinion on the legality and
validity of the following arrangement ("Arrangement") under the relevant
agreements ("Agreements") among Shanghai Huacheng Southwest Travel Agency Co.,
Ltd. ("Service Company"), Shanghai Ctrip Commerce Co., Ltd. ("Holding
Shareholder") and Ctrip Computer Technology ( Shanghai ) Co., Ltd. ("WOFE"):

         WOFE wholly owned by an affiliate of the Company, enters into following
agreements and arrangements ("Contractual Arrangements") with the Service
Company and the Holding Shareholder, which is holding controlling interests in
the Service Company:

     1.  Exclusive technology consulting and services agreement ("Exclusive
Technology Services Agreement") entered into by and between WOFE and the Service
Company. According to the Exclusive Technology Services Agreement, WOFE will
provide technology-consulting services to the Service Company for a fee
calculated on the basis of actual number of tours arranged and actual number of
air tickets issued by the Service Company at the relevant time.


                                       1





                                                                    EXHIBIT 99.3


    2.   Share pledge agreement ("Share Pledge Agreement") entered into by and
between WOFE and the Holding Shareholder. According to the Share Pledge
Agreement, the Holding Shareholder will pledge its equity interests in the
Service Company to WOFE to guarantee the performance of the Service Company
under the Exclusive Technology Services Agreement. The share pledge may be
enforced by WOFE in the event of any breach or non-payment by the Service
Company.

    3.   Trademark license agreement ("Trademark Agreement") entered into by and
between WOFE and the Service Company. According to the Trademark License
Agreement, WOFE license to Service Company a non-exclusive right to use certain
trademarks in return for a license fee, and WOFE has the exclusive right to
exempt the obligation of the Service Company to pay the license fee at its own
discretion.

    4.   Software license agreement ("Software License Agreement") entered into
by and between WOFE and the Service Company. According to the Software License
Agreement, WOFE license to the Service Company a non-exclusive right to use
certain softwares in return for a license fee, and WOFE has the exclusive right
to exempt the obligation of the Service Company to pay the license fee at its
own discretion.

    5.   Business operating agreement ("Business Operating Agreement") entered
into by and among WOFE, the Service Company and the Holding Shareholder.
According to the Business Operating Agreement,

               o   in order for the Service Company to obtain bank financing,
                   WOFE agrees to provide a guarantee for the payment
                   obligations of the Service Company when it is required by any
                   of third party.

               o   the Service Company must appoint as Chief Executive Officer,
                   Chief Financial Officer and other high-ranking officers,
                   individuals that are recommended by the WOFE.

               o   the Service Company cannot engage in any activity that could
                   substantially affect its assets, liabilities, equity or
                   operations, such as incurring any debt, purchasing or selling
                   any assets, granting any third party a security interest in
                   its property or assigning any of its contracts to a third
                   party, without the prior written approval of the WOFE.

     6.   Power of Attorney ("Power of Attorney") issued by the Holding
Shareholder. According to the Power of Attorney, the Holding Shareholder has
given irrevocable proxies to Neil Shen, an employee of the WOFE, to vote on all
corporate matters of the Service Company, including the sale and transfer of the
Holding Shareholder' s interests in the Service Company. WOFE can replace this
employee at any time with any other employee of WOFE.



                                       2


                                                                    EXHIBIT 99.3

         Based on the foregoing and our review of the relevant documents, we are
of the opinion that:


      1. WOFE has been duly incorporated and is validly existing as a wholly
foreign owned enterprise with legal person status in good standing under the
laws of the PRC. All of the registered capital of WOFE has been fully paid and
is owned by the Affiliate directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.

      2. The Service Company has been duly incorporated and is validly existing
as a privately owned enterprise with legal person status in good standing under
the laws of the PRC. All of the registered capital of the Service Company has
been fully paid and, to the best of our knowledge after due inquiry, 90% equity
interest in the Service Company is owned by Shanghai Ctrip Commerce Limited
directly, and is free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, except the pledge created under the
Contractual Arrangements.

      3. Each of WOFE and the Service Company has legal right, power and
authority (corporate and other) to own, lease and operate its properties and to
conduct its business as described in their business licenses and to enter into
and perform its obligations under the Contractual Arrangements.

      4. Each agreement related to the Contractual Arrangements, to which WOFE
and Service Company are the parties has been duly authorized, executed and
delivered by such WOFE and Service Company, and on the performance of which will
not require any approvals, consents, etc other than the ones that are clearly
obtained or waived, is in proper legal form under the laws of the PRC for the
enforcement thereof against the parties thereto with no conflict or violation
with PRC laws or regulations, and constitutes a valid and legally binding
obligation of the parties thereto, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights
generally and to general equity principles.


         This opinion relates to the laws of the PRC (other than the laws of the
Hong Kong Special Administrative Region) in effect on the date hereof.


         We hereby consent to the use of this opinion in, and the filing hereof
as an Exhibit to, the above-mentioned Registration Statement and to the
reference to our name under the headings "Risk Factors," "Enforceability of
Civil Liabilities," "Chinese Government Regulations" and "Related Party
Transactions" in the prospectus included in such Registration Statement.  In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the regulations promulgated thereunder.



                                                Yours faithfully,



                                                Commerce & Finance Law Offices



                                       3




                                                                    EXHIBIT 99.4


                                     [LOGO]

                         COMMERCE & FINANCE LAW OFFICES
                714 Huapu International Plaza 19 Chaowai Avenue,
               Chaoyang District, Beijing, PRC; Postcode: 100020
    Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203
    E-mail Address: beijing@tongshang.com Website: www.tongshang.com.cn

                               [ ] November, 2003

To:  Ctrip.com International, Ltd.
     3F, Building 63-64
     No. 421 Hong Cao Road
     Shanghai 200233, PRC


           RE: BEIJING CHENHAO XINYE AIR- TICKETING SERVICE CO., LTD.

Ladies and Gentlemen,

         We are lawyers qualified in the People's Republic of China ("PRC") and
are qualified to issue an opinion on the laws of the PRC.

         We have acted as PRC counsel for Ctrip.com International, Ltd. (the
"Company"), a company incorporated under the laws of the Cayman Islands, in
relation to the Company's proposed initial public offering of American
depositary shares ("ADSs") representing its ordinary shares and listing of ADSs
on the NASDAQ. We have been requested to give this opinion on the legality and
validity of the following arrangement ("Arrangement") under the relevant
agreements ("Agreements") among Ctrip.com ( Hong Kong ) Limited, Beijing Chenhao
Xinye Air- Ticketing Service Co., Ltd. ("Service Company"), shareholders of the
Service Company and Ctrip Computer Technology (Shanghai) Co., Ltd. ("WOFE"):

         1. Loans ("Loan Arrangement") respectively to Fan Min and Ji Qi, two
ultimate shareholders ("Ultimate Shareholders") of the Service Company.

         1.1 Under the loan agreements entered into respectively by and between
Ctrip.com ( Hong Kong ) Limited, an affiliate ("Affiliate") of the Company, and
each of the Ultimate Shareholders, the Affiliate advanced necessary funds to
each of the Ultimate Shareholders for the purchase of the equity interests in
the Service Company.

         1.2 The term of such Loan Agreements is 10 years and can be extended
with both parties' consents. The Ultimate Shareholders can only repay the loan
by the way of transferring their ownership in the Service Company to the entity
or entities agreed by the Affiliate.



                                       1






                                                                    EXHIBIT 99.4

         1.3 The loan provided to each of the Ultimate Shareholders shall
respectively become due wholly and all of the equity interest must be
transferred by each of such Ultimate Shareholders to the entity or entities
agreed by the Affiliate when one of the following events occur:

         o    The Ultimate Shareholders dies or becomes mentally disable;

         o    Fan Min is no long employed by the Affiliate or an affiliate of
              the Affiliate, or Ji Qi is no long a director of the Affiliate or
              an affiliate of the Affiliate;

         o    Any one of the Ultimate Shareholders is involved in criminal
              activities;

         o    Any one of the Ultimate Shareholders is subject to a claim by any
              third party for an amount in excess of RMB500,000; or

         o    Foreign investors are permitted to invest in the business of air
              ticketing, and the relevant authorities start to approve such
              business in accordance with the applicable laws of PRC, and
              Affiliate decides to execute the option.

         1.4 No interest will accrue on these loans. However, the Affiliate will
be entitled to any proceeds resulting from the sale by these Ultimate
Shareholders of their equity interests in the Service Company.

         2. Exclusive purchase arrangement respectively to the Ultimate
Shareholders of Service Company.

         2.1 Under the said exclusive purchase agreements entered into
respectively by and among the Affiliate, each of the Ultimate Shareholders and
the Service Company, the Affiliate have an exclusive option to purchase from
each of the Ultimate Shareholders all of his or her interest in the Service
Company when permitted by PRC law.

         2.2 Under the option agreements, the Service Company agree not to take
any of the following actions without prior written consent from the Affiliate or
WOFE:

         o    alter its articles of association or registered capital;

         o    sell or in any way transfer its assets, business, receivables or
              rights or to create any encumbrances thereon;

         o    take up or assume any debt (except those arising in the normal
              course of business or having been disclosed to the Affiliate );

         o    enter in to any transaction or contract of value exceeding RMB [ ]
              (except those executed in the normal course of business);

         o    grant any loan;

         o    enter into any merger, consolidation, acquisition or investment
              agreement; or

         o    distribute any dividend to shareholders unless requested by the
              Affiliate.

                                       2



                                                                    EXHIBIT 99.4


         2.3 Under the option agreements, the Ultimate Shareholders agree not to
take any of the following actions without prior written consent from the
Affiliate or WOFE:

         o    sell or in any way dispose of or create any encumbrances on his or
              her interest in the Service Company (except for the pledge of
              shares in favor of WOFE);

         o    pass any resolution relating to the sale, transfer or pledge of
              their shares of the Service Company (except for the pledge of
              shares in favor of WOFE); or

         o    pass any resolution relating to a merger or consolidation of the
              Service Company or any acquisition by, or investment in, any
              business by the Service Company.

         3. Economic relationships and contractual arrangements between WOFE,
the Service Company and the Ultimate Shareholders

         WOFE wholly owned by the Affiliate enters into following agreements and
arrangements ("Contractual Arrangements") with the Service Company/ the Ultimate
Shareholders:

         3.1 Exclusive technology consulting and services agreement ("Exclusive
Technology Services Agreement") entered into by and between WOFE and the Service
Company. According to the Exclusive Technology Services Agreement, WOFE will
provide technology-consulting services to the Service Company for a fee
calculated on the basis of actual number of air tickets issued by the Service
Company at the relevant time.

         3.2 Share pledge agreement ("Share Pledge Agreement") entered into by
and between WOFE and the Ultimate Shareholders. According to the Share Pledge
Agreement, the Ultimate Shareholder will pledge their equity interest in the
Service Company to WOFE to guarantee the performance of the Service Company
under the Exclusive Technology Services Agreement. The share pledge may be
enforced by WOFE in the event of any breach or non-payment by the Service
Company.

         3.3 Trademark license agreement ("Trademark Agreement") entered into by
and between WOFE and the Service Company. According to the Trademark License
Agreement, WOFE license to Service Company a non-exclusive right to use certain
trademark in return for a license fee, and WOFE has the exclusive right to
exempt the obligation of the Service Company to pay the license fee at its own
discretion.

         3.4 Software license agreement ("Software License Agreement") entered
into by and between WOFE and the Service Company. According to the Software
License Agreement, WOFE license to the Service Company a non-exclusive right to
use certain softwares in return for a license fee, and WOFE has the exclusive
right to exempt the obligation of the Service Company to pay the license fee at
its own discretion.


                                       3


                                                                    EXHIBIT 99.4


         3.5 Business operating agreement ("Business Operating Agreement")
entered into by and among WOFE, the Service Company and the Ultimate
Shareholders. According to the Business Operating Agreement,

         o    in order for the Service Company to obtain bank financing, WOFE
              agrees to provide a guarantee for the payment obligations of the
              Service Company when it is required by any of third party.

         o    the Service Company must appoint as Chief Executive Officer, Chief
              Financial Officer and other high-ranking officers, individuals
              that are recommended by the WOFE.

         o    the Service Company cannot engage in any activity that could
              substantially affect its assets, liabilities, equity or
              operations, such as incurring any debt, purchasing or selling any
              assets, granting any third party a security interest in its
              property or assigning any of its contracts to a third party,
              without the prior written approval of the WOFE.

         3.6 Power of Attorney ("Power of Attorney") issued by the Ultimate
Shareholders. According to the Power of Attorney, the Ultimate Shareholders have
given irrevocable proxies to Neil Shen, an employee of the WOFE, to vote on all
corporate matters of Service Company, including the sale and transfer of the
shareholders' interest in Service Company. WOFE can replace this employee at any
time with any other employee of WOFE.

         Based on the foregoing and our review of the relevant documents, we are
of the opinion that:

         1. WOFE has been duly incorporated and validly exists as a wholly
foreign owned enterprise with legal person status in good standing under the
laws of the PRC. All of the registered capital of WOFE has been fully paid and
is owned by the Affiliate directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.

         2. The Service Company has been duly incorporated and validly exists as
a privately owned enterprise with legal person status in good standing under the
laws of the PRC. All of the registered capital of the Service Company has been
fully paid and, to the best of our knowledge after due inquiry, 20% and 80%
equity interest in the Service Company are respectively owned by Mr. Fan Min and
Mr. Ji Oi directly, and such equity interest are each free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity, except
the pledge created under the Contractual Arrangements.

         3. Each of WOFE and the Service Company has legal right, power and
authority (corporate and other) to own, lease and operate its properties and to
conduct its business as described in their business licenses and to enter into
and perform its obligations under the Contractual Arrangements.

         4. Each agreement related to the Contractual Arrangements, to which
WOFE and Service Company are the parties has been duly authorized, executed and
delivered by


                                       4


                                                                    EXHIBIT 99.4


such WOFE and Service Company, and on the performance of which will not require
any approvals, consents, etc other than the ones that are clearly obtained or
waived, is in proper legal form under the laws of the PRC for the enforcement
thereof against the parties thereto with no conflict or violation with PRC laws
or regulations, and constitutes a valid and legally binding obligation of the
parties thereto, enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights generally and to
general equity principles.

         5. Each of agreements related to the Loan Arrangement is in proper
legal form under the laws of the PRC for the enforcement thereof against each of
Ultimate Shareholders and the Affiliate with no conflict or violation with PRC
laws or regulations and, assuming due authorization, execution and delivery by
the Affiliate, and due approval, consent for the performance of agreements
obtained or waived, constitutes a valid and legally binding obligation of each
of Ultimate Shareholders and the Affiliate under the PRC law, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.

         This opinion relates to the laws of the PRC (other than the laws of the
Hong Kong Special Administrative Region) in effect on the date hereof.


         We hereby consent to the use of this opinion in, and the filing hereof
as an Exhibit to, the above-mentioned Registration Statement and to the
reference to our name under the headings "Risk Factors," "Enforceability of
Civil Liabilities," "Chinese Government Regulations" and "Related Party
Transactions" in the prospectus included in such Registration Statement.  In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the regulations promulgated thereunder.


                                           Yours faithfully,



                                           Commerce & Finance Law Offices





                                       5



                                                                    EXHIBIT 99.5


                                     [LOGO]

                         COMMERCE & FINANCE LAW OFFICES
                714 Huapu International Plaza 19 Chaowai Avenue,
                Chaoyang District, Beijing, PRC; Postcode: 100020
     Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203
         E-mail Address: beijing@tongshang.com Website: www.tongshang.com.cn

                                             [ ] November, 2003

To:      Ctrip.com International, Ltd.
         3F, Building 63-64
         No. 421 Hong Cao Road
         Shanghai 200233, PRC



              RE: GUANGZHOU GUANGCHENG COMMERCIAL SERVICE CO., LTD.

Ladies and Gentlemen,

     We are lawyers qualified in the People's Republic of China ("PRC") and are
qualified to issue an opinion on the laws of the PRC.

     We have acted as PRC counsel for Ctrip.com International, Ltd. (the
"Company"), a company incorporated under the laws of the Cayman Islands, in
relation to the Company's proposed initial public offering of American
depositary shares ("ADSs") representing its ordinary shares and listing of ADSs
on the NASDAQ. We have been requested to give this opinion on the legality and
validity of the following arrangement ("Arrangement") under the relevant
agreements ("Agreements") among Ctrip.com ( Hong Kong ) Limited, shareholders of
Guangzhou Guangcheng Commercial Service Co., Ltd. and Ctrip Computer Technology
(Shanghai) Co., Ltd. ("WOFE"):

     1. Loans ("Loan Arrangement") respectively to Fan Min and Zheng Nanyan, two
ultimate shareholders ("Ultimate Shareholders") of Guangzhou Guangcheng
Commercial Service Co., Ltd. ("Service Company").

     1.1 Under the loan agreements entered into respectively by and between
Ctrip.com ( Hong Kong ) Limited, an affiliate ("Affiliate") of the Company, and
each of the Ultimate Shareholders, the Affiliate advanced necessary funds to
each of the Ultimate Shareholders for the purchase of the equity interests in
the Service Company.

     1.2 The term of such Loan Agreements is 10 years and can be extended with
both parties' consents. The Ultimate Shareholders can only repay the loan by the
way of transferring their ownership in the Service Company to the entity or
entities agreed by the Affiliate.


                                       1


                                                                    EXHIBIT 99.5


     1.3 The loan provided to each of the Ultimate Shareholders shall
respectively become due wholly and all of the equity interest must be
transferred by such Ultimate Shareholders to the entity or entities agreed by
the Affiliate when one of the following events occur:

     o    Such Ultimate Shareholders dies or becomes mentally disable;

     o    Any one of the Ultimate Shareholders is no long employed by the
          Affiliate or an affiliate of the Affiliate;

     o    Any one of the Ultimate Shareholders is involved in criminal
          activities;

     o    Any one of the Ultimate Shareholders is subject to a claim by any
          third party for an amount in excess of RMB500,000; or

     o    Foreign investors are permitted to invest in the business of air
          ticketing, and the relevant authorities start to approve such business
          in accordance with the applicable laws of PRC, and Affiliate decides
          to execute the option.

     1.4 No interest will accrue on these loans. However, the Affiliate will be
entitled to any proceeds resulting from the sale by these Ultimate Shareholders
of their equity interests in the Service Company.

     2. Exclusive purchase arrangement respectively to the Ultimate Shareholders
of Service Company.

     2.1 Under the said exclusive purchase agreements entered into respectively
by and among the Affiliate, each of the Ultimate Shareholders and the Service
Company, the Affiliate have an exclusive option to purchase from each of the
Ultimate Shareholders all of his or her interest in the Service Company when
permitted by PRC law.

     2.2 Under the option agreements, the Service Company agree not to take any
of the following actions without prior written consent from the Affiliate or
WOFE:

     o    alter its articles of association or registered capital;

     o    sell or in any way transfer its assets, business, receivables or
          rights or to create any encumbrances thereon;

     o    take up or assume any debt (except those arising in the normal course
          of business or having been disclosed to the Affiliate);

     o    enter in to any transaction or contract of value exceeding RMB [ ]
          (except those executed in the normal course of business);

     o    grant any loan;

     o    enter into any merger, consolidation, acquisition or investment
          agreement; or

     o    distribute any dividend to shareholders unless requested by the
          Affiliate.


                                       2


                                                                    EXHIBIT 99.5


     2.3 Under the option agreements, the Ultimate Shareholders agree not to
take any of the following actions without prior written consent from the
Affiliate or WOFE:

     o    sell or in any way dispose of or create any encumbrances on his or her
          interest in the Service Company (except for the pledge of shares in
          favor of WOFE);

     o    pass any resolution relating to the sale, transfer or pledge of their
          shares of the Service Company (except for the pledge of shares in
          favor of WOFE); or

     o    pass any resolution relating to a merger or consolidation of the
          Service Company or any acquisition by, or investment in, any business
          by the Service Company.

     3. Economic relationships and contractual arrangements between WOFE, the
Service Company and the Ultimate Shareholders

     WOFE wholly owned by the Affiliate enters into following agreements and
arrangements ("Contractual Arrangements") with the Service Company/ the Ultimate
Shareholders:

     3.1 Exclusive technology consulting and services agreement ("Exclusive
Technology Services Agreement") entered into by and between WOFE and the Service
Company. According to the Exclusive Technology Services Agreement, WOFE will
provide technology-consulting services to the Service Company for a fee
calculated on the basis of actual number of air tickets issued by the Service
Company at the relevant time.

     3.2 Share pledge agreement ("Share Pledge Agreement") entered into by and
between WOFE and the Ultimate Shareholders. According to the Share Pledge
Agreement, the Ultimate Shareholder will pledge their equity interest in the
Service Company to WOFE to guarantee the performance of the Service Company
under the Exclusive Technology Services Agreement. The share pledge may be
enforced by WOFE in the event of any breach or non-payment by the Service
Company.

     3.3 Trademark license agreement ("Trademark Agreement") entered into by and
between WOFE and the Service Company. According to the Trademark License
Agreement, WOFE license to Service Company a non-exclusive right to use the
trademarks in return for a license fee, and WOFE has the exclusive right to
exempt the obligation of the Service Company to pay the license fee at its own
discretion.

     3.4 Software license agreement ("Software License Agreement") entered into
by and between WOFE and the Service Company. According to the Software License
Agreement, WOFE license to the Service Company a non-exclusive right to use the
softwares in return for a license fee, and WOFE has the exclusive right to
exempt the obligation of the Service Company to pay the license fee at its own
discretion.


                                       3


                                                                    EXHIBIT 99.5


     3.5 Business operating agreement ("Business Operating Agreement") entered
into by and among WOFE, the Service Company and the Ultimate Shareholders.
According to the Business Operating Agreement,

     o    in order for the Service Company to obtain bank financing, WOFE agrees
          to provide a guarantee for the payment obligations of the Service
          Company when it is required by any of third party.

     o    the Service Company must appoint as Chief Executive Officer, Chief
          Financial Officer and other high-ranking officers, individuals that
          are recommended by the WOFE.

     o    the Service Company cannot engage in any activity that could
          substantially affect its assets, liabilities, equity or operations,
          such as incurring any debt, purchasing or selling any assets, granting
          any third party a security interest in its property or assigning any
          of its contracts to a third party, without the prior written approval
          of the WOFE.

     3.6 Power of Attorney ("Power of Attorney") issued by the Ultimate
Shareholders. According to the Power of Attorney, the Ultimate Shareholders have
given irrevocable proxies to Neil Shen, an employee of the WOFE, to vote on all
corporate matters of Service Company, including the sale and transfer of the
shareholders' interest in Service Company. WOFE can replace this employee at any
time with any other employee of WOFE.

     Based on the foregoing and our review of the relevant documents, we are of
the opinion that:

     1. WOFE has been duly incorporated and is validly existing as a wholly
foreign owned enterprise with legal person status in good standing under the
laws of the PRC. All of the registered capital of WOFE has been fully paid and
is owned by the Affiliate directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.

     2. The Service Company has been duly incorporated and is validly existing
as a privately owned enterprise with legal person status in good standing under
the laws of the PRC. All of the registered capital of the Service Company has
been fully paid and, to the best of our knowledge after due inquiry, 90% and 10%
equity interest in the Service Company are respectively owned by Mr. Fan Min and
Mr. Zheng Nanyan directly, and such equity interest are each free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity,
except the pledge created under the Contractual Arrangements.

3. Each of WOFE and the Service Company has legal right, power and authority
(corporate and other) to own, lease and operate its properties and to conduct
its business as described in their business licenses and to enter into and
perform its obligations under the Contractual Arrangements.


                                       4


                                                                    EXHIBIT 99.5


     4. Each agreement related to the Contractual Arrangements, to which WOFE
and Service Company are the parties has been duly authorized, executed and
delivered by such WOFE and Service Company, and on the performance of which will
not require any approvals, consents, etc other than the ones that are clearly
obtained or waived, is in proper legal form under the laws of the PRC for the
enforcement thereof against the parties thereto with no conflict or violation
with PRC laws or regulations, and constitutes a valid and legally binding
obligation of the parties thereto, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights
generally and to general equity principles.

     5. Each of agreements related to the Loan Arrangement is in proper legal
form under the laws of the PRC for the enforcement thereof against each of
Ultimate Shareholders and the Affiliate with no conflict or violation with PRC
laws or regulations and, assuming due authorization, execution and delivery by
the Affiliate, and due approval, consent for the performance of agreements
obtained or waived, constitutes a valid and legally binding obligation of each
of Ultimate Shareholders and the Affiliate under the PRC law, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.

     This opinion relates to the laws of the PRC (other than the laws of the
Hong Kong Special Administrative Region) in effect on the date hereof.


         We hereby consent to the use of this opinion in, and the filing hereof
as an Exhibit to, the above-mentioned Registration Statement and to the
reference to our name under the headings "Risk Factors," "Enforceability of
Civil Liabilities," "Chinese Government Regulations" and "Related Party
Transactions" in the prospectus included in such Registration Statement.  In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the regulations promulgated thereunder.



                                        Yours faithfully,



                                        Commerce & Finance Law Offices


                                       5



                                                                    EXHIBIT 99.6

                                     [LOGO]

                         COMMERCE & FINANCE LAW OFFICES
                714 Huapu International Plaza 19 Chaowai Avenue,
               Chaoyang District, Beijing, PRC; Postcode: 100020
    Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203
      E-mail Address: beijing@tongshang.com Website: www.tongshang.com.cn

                               [ ] November, 2003

To:      Ctrip.com International, Ltd.
         3F, Building 63-64
         No. 421 Hong Cao Road
         Shanghai 200233, PRC


           RE: SHANGHAI CUIMING INTERNATIONAL TRAVEL AGENCY CO., LTD.

Ladies and Gentlemen,

     We are lawyers qualified in the People's Republic of China ("PRC") and are
qualified to issue an opinion on the laws of the PRC.

     We have acted as PRC counsel for Ctrip.com International, Ltd. (the
"Company"), a company incorporated under the laws of the Cayman Islands, in
relation to the Company's proposed initial public offering of American
depositary shares ("ADSs") representing its ordinary shares and listing of ADSs
on the NASDAQ. We have been requested to give this opinion on the legality and
validity of the following arrangement ("Arrangement") under the relevant
agreements ("Agreements") among Ctrip.com ( Hong Kong ) Limited, shareholders of
Shanghai Cuiming International Travel Agency Co., Ltd. and Ctrip Computer
Technology ( Shanghai ) Co., Ltd. ("WOFE"):

     1. Loans ("Loan Arrangement") to Mr. Fan Min, a shareholder who owns 66% of
the equity interests in Shanghai Cuiming International Travel Agency Co., Ltd.
("Service Company").

     1.1 Under the loan agreement entered into by and between Ctrip.com (Hong
Kong ) Limited, an affiliate ("Affiliate") of the Company, and Fan Min, the
Affiliate advanced necessary funds to Fan Min for investment into the Service
Company.

     1.2 The term of such Loan Agreement is 10 years and can be extended with
both parties' consents. Fan Min can only repay the loan by the way of
transferring his ownership in the Service Company to the entity or entities
agreed by the Affiliate.



                                       1

                                                                    EXHIBIT 99.6

     1.3 The loans provided to Fan Min shall become due wholly and all of the
equity interest must be transferred by him to the entity or entities agreed by
the Affiliate when one of the following events occur:

     o    Fan Min dies or becomes mentally disable;

     o    Fan Min is no long employed by the Affiliate or an affiliate of the
          Affiliate;

     o    Fan Min is involved in criminal activities;

     o    Fan Min is subject to a claim by any third party for an amount in
          excess of RMB500,000; or

     o    Foreign investors are permitted to invest in the business of
          international agency and the relevant authorities start to approve
          such business in accordance with the applicable laws of PRC, and
          Affiliate decides to execute the option.

     1.4 No interest will accrue on these loans. However, the Affiliate will be
entitled to any proceeds resulting from the sale by Fan Min of his equity
interests in the Service Company.

     2. Exclusive purchase arrangement to Fan Min.

     2.1 Under the said exclusive purchase agreements entered into respectively
by and among the Affiliate, Fan Min and the Service Company, the Affiliate have
an exclusive option to purchase from Fan Min all of his interest in the Service
Company when permitted by PRC law.

     2.2 Under the option agreements, the Service Company agree not to take any
of the following actions without prior written consent from the Affiliate or
WOFE:

     o    alter its articles of association or registered capital;

     o    sell or in any way transfer its assets, business, receivables or
          rights or to create any encumbrances thereon;

     o    take up or assume any debt (except those arising in the normal course
          of business or having been disclosed to the Affiliate);

     o    enter in to any transaction or contract of value exceeding RMB 50,000
          (except those executed in the normal course of business);

     o    grant any loan;

     o    enter into any merger, consolidation, acquisition or investment
          agreement; or

     o    distribute any dividend to shareholders unless requested by the
          Affiliate.

     2.3 Under the option agreements, Fan Min agree not to take any of the
following actions without prior written consent from the Affiliate or WOFE:

     o    sell or in any way dispose of or create any encumbrances on his or



                                       2

                                                                    EXHIBIT 99.6

          her interest in the Service Company (except for the pledge of shares
          in favor of WOFE);

     o    pass any resolution relating to the sale, transfer or pledge of their
          shares of the Service Company (except for the pledge of shares in
          favor of WOFE); or

     o    pass any resolution relating to a merger or consolidation of the
          Service Company or any acquisition by, or investment in, any business
          by the Service Company.

     3. Economic relationships and contractual arrangements between WOFE, the
Service Company and the Shareholders of the Service Company.

     WOFE wholly owned by the Affiliate enters into following agreements and
arrangements ("Contractual Arrangements") with the Service Company/ the
Shareholders:

     3.1 Technology services consulting and agreement ("Technology Services
Agreement") entered into by and between WOFE and the Service Company. According
to the Technology Services Agreement, WOFE will provide technology-consulting
services to the Service Company for a fixed fee.

     3.2 Share pledge agreement ("Share Pledge Agreement") entered into by and
between WOFE and Fan Min. According to the Share Pledge Agreement, Fan Min will
pledge his equity interest in the Service Company to WOFE to guarantee the
performance of the Service Company under the Exclusive Technology Services
Agreement. The share pledge may be enforced by WOFE in the event of any breach
or non-payment by the Service Company.

     3.3 Trademark license agreement ("Trademark Agreement") entered into by and
between WOFE and the Service Company. According to the Trademark License
Agreement, WOFE license to Service Company a non-exclusive right to use certain
trademarks in return for a license fee, and WOFE has the exclusive right to
exempt the obligation of the Service Company to pay the license fee at its own
discretion.

     3.4 Software license agreement ("Software License Agreement") entered into
by and between WOFE and the Service Company. According to the Software License
Agreement, WOFE license to the Service Company a non-exclusive right to use
certain softwares in return for a license fee, and WOFE has the exclusive right
to exempt the obligation of the Service Company to pay the license fee at its
own discretion.

     3.5 Business operating agreement ("Business Operating Agreement") entered
into by and among WOFE, the Service Company and all shareholders of the service
company. According to the Business Operating Agreement,

     o    in order for the Service Company to obtain bank financing, WOFE agrees
          to provide a guarantee for the payment obligations of the Service
          Company when it is required by any of third party.



                                       3

                                                                    EXHIBIT 99.6

     o    the Service Company must appoint as Chief Executive Officer, Chief
          Financial Officer and other high-ranking officers, individuals that
          are recommended by the WOFE.

     o    the Service Company cannot engage in any activity that could
          substantially affect its assets, liabilities, equity or operations,
          such as incurring any debt, purchasing or selling any assets, granting
          any third party a security interest in its property or assigning any
          of its contracts to a third party, without the prior written approval
          of the WOFE.

     3.6 Power of Attorney ("Power of Attorney") issued by Fan Min. According to
the Power of Attorney, Fan Min have given irrevocable proxies to Neil Shen, an
employee of the WOFE, to vote on all corporate matters of Service Company,
including the sale and transfer of Fan Min' s interest in Service Company. WOFE
can replace this employee at any time with any other employee of WOFE.


     Based on the foregoing and our review of the relevant documents, we are of
the opinion that:

     1. WOFE has been duly incorporated and is validly existing as a wholly
foreign owned enterprise with legal person status in good standing under the
laws of the PRC. All of the registered capital of WOFE has been fully paid and
is owned by the Affiliate directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.

     2. The Service Company has been duly incorporated and is validly existing
as an enterprise with legal person status in good standing under the laws of the
PRC. All of the registered capital of the Service Company has been fully paid
and, to the best of our knowledge after due inquiry, 66% equity interest in the
Service Company is owned by Fan Min directly, and is free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity, except
the pledge created under the Contractual Arrangements.

     3. Each of WOFE and the Service Company has legal right, power and
authority (corporate and other) to own, lease and operate its properties and to
conduct its business as described in their business licenses and to enter into
and perform its obligations under the Contractual Arrangements.

     4. Each agreement related to the Contractual Arrangements, to which WOFE
and Service Company are the parties has been duly authorized, executed and
delivered by such WOFE and Service Company, and on the performance of which will
not require any approvals, consents, etc other than the ones that are clearly
obtained or waived, is in proper legal form under the laws of the PRC for the
enforcement thereof against the parties thereto with no conflict or violation
with PRC laws or regulations, and constitutes a valid and legally binding
obligation of the parties thereto, enforceable in accordance



                                       4

                                                                    EXHIBIT 99.6

with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.

     5. Each of agreements related to the Loan Arrangement is in proper legal
form under the laws of the PRC for the enforcement thereof against each of
Ultimate Shareholders and the Affiliate with no conflict or violation with PRC
laws or regulations and, assuming due authorization, execution and delivery by
the Affiliate, and due approval, consent for the performance of agreements
obtained or waived, constitutes a valid and legally binding obligation of each
of Ultimate Shareholders and the Affiliate under the PRC law, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.

     This opinion relates to the laws of the PRC (other than the laws of the
Hong Kong Special Administrative Region) in effect on the date hereof.


     We hereby consent to the use of this opinion in, and the filing hereof as
an Exhibit to, the above-mentioned Registration Statement and to the reference
to our name under the headings "Risk Factors," "Enforceability of Civil
Liabilities," "Chinese Government Regulations" and "Related Party Transactions"
in the prospectus included in such Registration Statement. In giving such
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the regulations promulgated thereunder.



                                      Yours faithfully,



                                      Commerce & Finance Law Offices



                                       5



                                                                    EXHIBIT 99.7



                  (COMMERCE & FINANCE LAW OFFICES LETTERHEAD)

                             _________________, 2003

To: Ctrip.com International, Ltd.
    3F, Building 63-64
    No. 421 Hong Cao Road
    Shanghai 200233
    People's Republic of China


                        RE: CTRIP.COM INTERNATIONAL, LTD.

Dear Sirs,

     We are lawyers qualified in the People's Republic of China ("PRC") and are
qualified to issue opinion on the laws of the PRC. We have acted as PRC counsel
for Ctrip.com International, Ltd. (the "Company"), a company incorporated under
the laws of the Cayman Islands, in relation to the Company's proposed listing on
Nasdaq National Market. We have been requested to give this opinion with regard
to the laws of PRC as of ___________, 2003, pursuant to Section 5 (b) of the
Underwriting Agreement dated ___________, 2003 (the "Underwriting Agreements")
among the several underwriters named therein and the Company relating to the
offering by the Company of up to ____________ American Depositary Shares each
representing ordinary shares of the Company.

     Unless otherwise defined herein, capitalized terms used in this opinion
shall have the same meaning as set forth in the Purchase Agreement.

     In such capacity, we have examined such documents, as we have considered
necessary for the purpose of giving this opinion, and obtain the relevant
confirmations from the Company.

     Based on the foregoing, we are of the opinion that:

     (i) Each of Ctrip Computer Technology (Shanghai) Limited and Ctrip Travel
Information Technology (Shanghai) Limited (each, a "PRC Subsidiary" and
together, the "PRC Subsidiaries") is a company duly incorporated with limited
liability and validly existing in good standing under the laws of the PRC. Each
PRC Subsidiary is duly qualified to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect. No steps have been or are being taken and no order or
resolution has been made or passed to appoint a receiver, liquidator or similar
officer of, or to wind up or





dissolve, any PRC Subsidiary.

     (ii) All of the registered capital of each PRC Subsidiary have been duly
and fully paid, non-assessable and are owned directly by Ctrip.com (Hong Kong)
Limited, free and clear of all liens, encumbrances, equities or claims. The
liability of Ctrip.com (Hong Kong) Limited in respect of equity interests in
each PRC Subsidiary is limited to its investments therein.

     (iii) Each of Shanghai Ctrip Commerce Co., Ltd. ("Shanghai Ctrip"),
Shanghai Huacheng Southwest Travel Agency Co., Ltd. ("Shanghai Huacheng"),
Beijing Chenhao Xinye Air-Ticketing Service Co., Ltd. ("Beijing Chenhao"),
Shanghai Cuiming International Travel Agency Co., Ltd. ("Shanghai Cuiming") and
Guangzhou Guangcheng Commercial Service Co., Ltd. ("Guangzhou Guangcheng")
(each, a "VIE" and together, the "VIEs") is a company duly incorporated with
limited liability and validly existing in good standing under the laws of the
PRC. Each VIE is duly qualified to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect. No steps have been or are being taken and no order or
resolution has been made or passed to appoint a receiver, liquidator or similar
officer of, or to wind up or dissolve, any VIE.

     (iv) All of the registered capital of each (a) Shanghai Ctrip, (b) Shanghai
Huacheng, (c) Beijing Chenhao, (d) Shanghai Cuiming and (e) Guangzhou Guangcheng
have been duly and fully paid, non-assessable and are owned directly by (v) Qi
Ji (51%) and Min Fan (49%), (w) Shanghai Ctrip (90%) and unaffiliated parties
(10%), (x) Qi Ji (80%) and Min Fan (20%), (y) Min Fan (66%) and unaffiliated
parties (34%) and (z) Min Fan (990%) and Alex Nanyan Zheng (10%), respectively,
free and clear of all liens, encumbrances, equities or claims.

     (v) Each PRC Subsidiary and VIE possesses adequate certificates,
authorities, approvals, licenses or permits issued by appropriate governmental
agencies or bodies in the PRC necessary to conduct its business as presently
conducted and as proposed to be conducted.

     (vi) Each PRC Subsidiary and VIE possesses valid licenses in full force and
effect or otherwise have the legal right to use, or can acquire on reasonable
terms, all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names (including the "Ctrip" name and logo) currently
employed by them, and none of the PRC Subsidiaries or VIEs has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing that, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in any
material adverse change in the condition, financial or otherwise, in the
earnings, business or operations of any PRC Subsidiary or VIE.

     (vi) After due inquiry, such counsel does not know of any Chinese legal or
governmental proceedings pending or threatened to which the Company or any of
its subsidiaries or the VIEs is a party or to which any of the properties of the
Company or any of its subsidiaries or the VIEs is subject that are required to
be described in the Registration Statement or the Prospectuses and are not so
described or of any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement





or the Prospectuses or to be filed as exhibits to the Registration Statement
that are not described or filed as required.

     (vii) To the best knowledge of us after due inquiry and based on the
confirmation of the Company, there are not outstanding guarantees or contingent
payment obligations of the PRC Subsidiaries or VIEs in respect of indebtedness
of third parties except as disclosed in the Prospectuses.

     (viii) To the best knowledge of us after due inquiry, the PRC Subsidiaries
and the VIEs are not (A) in violation of their respective Articles of
Association, business licenses and any other constituent documents or (B) in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to such counsel and to
which any of the PRC Subsidiaries or VIEs are a party or by which any of their
respective properties may be bound, except, in the case of clause (B) where such
violation or default would not, individually or in the aggregate, have a
material adverse effect on the general affairs, management, owner's equity,
results of operations or position, financial or otherwise, of any of the PRC
Subsidiaries or VIEs.

     (ix) To best knowledge of us after due inquiry, there is no pending or
threatened PRC regulatory, administrative or other governmental initiative that,
if implemented or adopted in the manner proposed or contemplated, would have a
material adverse effect on the operations of any PRC Subsidiary or VIE in the
PRC in the manner presently conducted or as disclosed in the Prospectuses.

     (x) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreements and the
Deposit Agreement will not contravene any provision of applicable law or the
certificate of incorporation, by-laws or other governing documents of any PRC
Subsidiary or VIE or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon any PRC Subsidiary or VIE that is material to the
Company and its subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental body,
agency or court of the PRC having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any such governmental body or agency is required for the
performance by the Company of its obligations under the Underwriting Agreements
or Deposit Agreement.

     (xi) Each of the Structuring Documents has been duly authorized, executed
and delivered by the Company, the PRC Subsidiaries, the VIEs, Qi Ji, Min Fan or
Alex Nanyan Zheng, as the case may be, and, assuming due authorization,
execution and delivery by any other party thereto, constitutes a valid and
legally binding obligation of the Company, the PRC Subsidiaries, the VIEs, Qi
Ji, Min Fan or Alex Nanyan Zheng, as the case may be, enforceable in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.

     (xii) The execution and delivery of each of the Structuring Documents to
which the Company, the PRC Subsidiaries, the VIEs, Qi Ji, Min Fan or Alex Nanyan
Zheng is a party and the compliance by each such entity with all of the
provisions of each of the Structuring Documents to which such entity is a party
and the consummations of the transactions contemplated by the Structuring will
not contravene or result in a breach or violation of any





of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument which
are governed by the law of the PRC to which any such entity is a party or by
such entity is bound or to which any of the properties or assets of such entity
is bound or to which any of the properties or assets of such entity is subject,
nor will such actions result in any violation of the charter, by-laws or any
other constituent document of the Company, the PRC Subsidiaries, the VIEs, Qi
Ji, Min Fan or Alex Nanyan Zheng, as the case may be, or any PRC statute, or any
order, rule or regulation of any court or governmental agency or body in PRC
having jurisdiction over such entity.

     (xiii) To be best knowledge of us after due inquiry, (A) the PRC tax laws
and regulations and other PRC laws and regulations applicable to the activities
of the PRC Subsidiaries and VIEs in the PRC (including regulatory fees, capital
gains, income, sales, withholding or other taxes and stamp or other issuance or
transfer taxes or duties to which any of the PRC Subsidiaries or VIEs may become
subject due to the conduct of activities in the PRC) are assessed or apply to
the PRC Subsidiaries and VIEs in substantially the same manner a are currently
applicable to any company incorporated under the PRC Company law, which is
engaged in the hotel-booking, air-ticketing, packaged-tour or advertising
services in the PRC and (B) there are no material PRC fees or taxes that are or
will become applicable to any of the PRC Subsidiaries or VIEs as a consequence
of the Structuring or the offering that have not been disclosed in the
Prospectuses.

     (xiv) The choice of law provisions set forth in the Underwriting Agreements
and the Deposit Agreements will be recognized by PRC courts; each of the
Company, the PRC Subsidiaries and the VIEs can sue and be sued in its own name
under the laws of the PRC.

     (xv) The Statements in the Prospectuses under "Risk Factors--Risks Relating
to Our Company--Chinese laws and regulations restrict foreign investment in the
air-ticketing, travel agency, advertising and Internet content provision
businesses, and substantial uncertainties exist with respect to the application
and implementation of Chinese laws and regulations", "Risk Factors--Risks
Relating to Our Company--If our affiliated Chinese entities or their
shareholders violate our contractual arrangements with them, our business could
be disrupted, our reputation may be harmed and we may have to resort to
litigation to enforce our rights which may be time consuming and expensive",
"Risk Factors--Risks Relating to Our Company--The air-ticketing, travel agency,
advertising and Internet industries are heavily regulated by the Chinese
government. If we fail to obtain or maintain all pertinent permits and
approvals, our business operations may be adversely affected", "Risk
Factors--Risks Related to Doing Business in China", "Enforceability of Civil
Liabilities" and "Chinese Government Regulations", insofar as they purport to
describe the provisions of PRC laws and documents referred to therein, are
accurate, complete and fair summaries thereof.

     This opinion relates to the laws of the PRC (other than the laws of the
Hong Kong Special Administrative Region) in effect on the date hereof.

     This opinion is given solely for the benefit of the persons to whom it is
addressed. It may not, except with our prior written permission, be relied upon
by anyone in connection with this opinion or used for any other purpose.

     We hereby consent to the use of this opinion in, and the filing hereof as
an Exhibit to, the above-mentioned Registration Statement and to the reference
to our name under the





headings "Risk Factors," "Enforceability of Civil Liabilities," "Chinese
Government Regulations" and "Related Party Transactions" in the prospectus
included in such Registration Statement. In giving such consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the
regulations promulgated thereunder.



                                            Yours faithfully,



                                            Commerce & Finance Law Offices



                                                                    EXHIBIT 99.8



MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
            Incorporated

  as U.S. Representative of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce Fenner & Smith
            Incorporated

North Tower
World Financial Center
New York, New York 10281-1209

Merrill Lynch Fast East Limited
  as International Representative of the
    several International Underwriters
c/o Merrill Lynch Far East Limited
18/F Asia Pacific Finance Tower
3 Garden Road
Central, Hong Kong


Dear Sirs,

              (1) Re: Ctrip.com (Hong Kong) Limited (the "Company")

We are a firm of solicitors qualified to practise the law of the Hong Kong
Special Administrative Region of the People's Republic of China ("Hong Kong")
and have been instructed by the Company to give certain opinions in respect of
the documents listed in Exhibit "A" and the English translation of the form of
such documents attached as Exhibit "B" (collectively the "Transaction
Documents") and other matters.

The opinions expressed herein are confined to and given on the basis of the laws
of Hong Kong currently in force as applied by the courts of Hong Kong at the
date hereof and our understanding of public policy in Hong Kong as at the date
hereof. We have not made any investigation or enquiry of, and we do not express
or imply any opinion as to, the laws of any jurisdiction other than Hong Kong.
These opinions are to be governed by and construed in accordance with the laws
of Hong Kong.


A.   DOCUMENTS

In rendering these opinions, we have examined originals or copies, certified or
otherwise, of the following documents:

(a)  the Transaction Documents and the English translation of the form of the
     Transaction Documents;





(b)  the Certificate of Incorporation of the Company;

(c)  the Memorandum and Articles of Association of the Company;

(d)  the Business Registration Certificate of the Company;

(e)  a Certificate of Director dated -- executed by Mr. Nanpeng SHEN as a
     director of the Company (the "Certificate");

(f)  the Register of Members of the Company;

(g)  the Register of Directors of the Company; and

(h)  copy of the minutes of meeting of directors of the Company dated 10
     September 2003 (the "Minutes").

We have also examined such other laws, regulations, records, documents,
certificates and instruments as we have deemed relevant or necessary for the
purpose of giving these opinions.


B.   SEARCHES

We have conducted or arranged to conduct the following searches in respect of
the Company:

(a)  company search at the Companies Registry made on [  ] November 2003;

(b)  winding up search at the Official Receiver's Office made on [  ] November
     2003; and

(c)  court search at the High Court Registry made on [  ] November 2003.


C.   ASSUMPTIONS

In giving these opinions, we have assumed the following:

(a)  All signatures on all documents (whether originals or copies) reviewed by
     us are genuine;

(b)  All documents submitted to us as originals are authentic and all documents
     submitted to us as copies conform with the originals of such documents;

(c)  All factual representations contained in all documents (including without
     limitation the Certificate) submitted to us are accurate and complete, and,
     save in respect of the Transaction Documents, all such documents are valid
     and subsisting;

(d)  (i)   The Transaction Documents have been executed and delivered by the
           relevant officer of the Company in the manner authorised by the
           Company on 10 September 2003;





     (ii)  All parties to the Transaction Documents (except the Company) have
           the power and authority to enter into, execute, deliver and perform
           the Transaction Documents in accordance with their respective terms
           and the Transaction Documents have been duly authorized, executed and
           delivered by or on behalf of such parties and are binding on and
           constitute legal, valid and enforceable obligations of such parties;
           moreover, the rights and obligations expressed in or implied by the
           Transaction Documents to be conferred on and assumed by such parties
           are within their statutory powers and authorities;

     (iii) The translation of the form of the Transaction Documents into English
           is true and accurate and there is no material difference in meaning
           between the English translation provided to us and the original
           Chinese version of the Transaction Documents;

(e)  The choice of the laws of the People's Republic of China (the "PRC") as the
     governing law of the Transaction Documents or the choice of international
     legal principles and practices in respect of matters not covered by
     formally published and publicly available laws of the PRC has been made by
     all parties in good faith and would be regarded as a valid and binding
     selection which will be upheld by the courts of the PRC as a matter of the
     laws of the PRC and by all other courts under all other relevant laws
     (other than the laws of Hong Kong);

(f)  Each of the Transaction Documents is valid and enforceable in accordance
     with the laws of the PRC;

(g)  There is no contractual or other prohibition (other than as may arise by
     virtue of the laws of Hong Kong) binding on the Company or on any other
     party prohibiting it from entering into and performing its obligations
     under the Transaction Documents;

(h)  All governmental approvals, licences and consents required otherwise than
     under the laws of Hong Kong to permit each party (except with respect to
     the Company) to the Transaction Documents to enter into, execute its rights
     under and perform the obligations expressed to be assumed by it in the
     relevant Transaction Documents have been obtained and remain in full force
     and effect, or where the same can only be obtained at the time of exercise
     of such rights or the performance of such obligations that the same will be
     duly obtained;

(i)  The information disclosed by the searches at the Companies Registry, the
     Official Receiver's Office, and the High Court Registry described in Part B
     of this letter is true, complete and up to date and such information has
     not since the dates and times of the respective searches been altered and
     such searches disclosed all information which had been delivered or sent
     electronically for registration or filing (as the case may be) up to the
     date of the searches;

(j)  the Minutes have not been revoked or superseded by subsequent resolutions
     of the directors of the Company in respect of the relevant subject matter;

(k)  No change has been made to the Memorandum and Articles of Association of
     the Company provided to us for inspection; and





(l)  Insofar as any obligation under the Transaction Documents is to be
     performed in any jurisdiction outside Hong Kong, its performance will not
     be illegal or ineffective by virtue of the laws of any such jurisdiction
     (as to which we do not express an opinion).


D.   OPINIONS

Based upon and relying upon the foregoing, and subject to the comments,
reservations and qualifications stated below, we are of the following opinions:

(a)  The Company was duly incorporated on 11 June 1999 as a private company with
     limited liability and is validly existing under the laws of the Hong Kong.
     No steps have been or are being taken and no order or resolution has been
     made or passed to appoint a receiver, liquidator or similar officer of, or
     to wind up or dissolve the Company.

(b)  The Company has the capacity and powers to own the assets and to carry on
     the businesses as conducted by it and the Memorandum and Articles of
     Association of the Company do not contain any restriction against the
     Company owning such assets or carry on such businesses.

(c)  The Company holds a valid Business Registration Certificate issued by the
     Commissioner of Inland Revenue which certificate is required under the laws
     of Hong Kong for carrying on business in Hong Kong.

(d)  All of the issued shares in the authorized capital of the Company have been
     duly and validly authorized and issued and are fully paid, non-assessable
     and are owned directly or indirectly by Ctrip.com International, Ltd., a
     Cayman Islands company, free and clear of all liens, encumbrances, equities
     or claims.

(e)  All consents, approvals, authorizations, orders, registrations and
     qualifications required of the Company in Hong Kong for the execution,
     delivery and performance of the Transaction Documents by the Company in
     Hong Kong, if applicable, have been made or unconditionally obtained in
     writing and no such consent, approval, authorization, order, registration
     or qualification has been withdrawn or is subject to any condition
     precedent which has not been fulfilled or performed.

(f)  If any action or proceeding is brought in a Hong Kong court to enforce any
     of the Transaction Documents and if, notwithstanding the fact that such
     Transaction Document is expressed to be governed by and interpreted in
     accordance with the laws of the PRC, such court, contrary to such
     expression, were to apply the laws of Hong Kong to govern and interpret the
     Transaction Document (whether because such court were to find the laws of
     Hong Kong to be the proper laws of the Transaction Document or because the
     laws of the PRC were not proven in that action or proceeding), the
     Transaction Document would constitute the legal, valid and binding
     agreement of the Company and would be enforceable against the Company in
     accordance with its terms.

(g)  The execution and delivery of each of the Transaction Documents to which
     the Company is a party and the compliance by the Company with all of the
     provisions of each of the Transaction Documents to which the Company is a
     party will not





     contravene or result in a breach or violation of any of the terms or
     provisions of, or constitute a default under, any indenture, mortgage, deed
     of trust, loan agreement or other agreement or instrument which are
     governed by the law of Hong Kong to which the Company is a party or by
     which the Company is bound or to which any of the properties or assets of
     the Company is bound or to which any of the properties or assets of the
     Company is subject, nor will such actions result in any violation of the
     charter, by-laws or any other constituent document of the Company or any
     Hong Kong statute, or any order, rule or regulation of any court or
     governmental agency or body in Hong Kong having jurisdiction over the
     Company.

(h)  Under current Hong Kong laws and regulations, there are no restrictions
     against the Company paying dividends which have been declared and payable
     on the shares of the Company to the shareholders of the Company in United
     States dollars or in any other currency except as may be stated in the
     Shareholders Agreement of Ctrip.com International, Ltd. dated 27 August
     2003.

(i)  The statements attached hereto as Exhibit "C" to be inserted under
     "Enforceability of Civil Liabilities" in the prospectuses relating to the
     offer of American Depositary Shares of Ctrip.com International, Ltd. in or
     about [ ] 2003, insofar as they purport to describe the provisions of Hong
     Kong laws and documents referred to therein, are accurate, complete and
     fair summaries thereof.


E.   RESERVATIONS

Our opinions herein are subject to the following comments, reservations and
qualifications:

(a)  No opinion is given in respect of any consent, approval, authorization,
     order, registration and qualification required by the Company in respect of
     the Transaction Documents.

(b)  Notice of a winding up order made or resolution passed or a receiver
     appointed may not be filed at the Companies Registry or the Official
     Receiver's Office immediately and there may therefore be a delay in the
     relevant notice appearing in the records in respect of the Company kept by
     the said registry and office.

(c)  The term "enforceable" as used above means that the obligations assumed by
     the Company under the Transaction Documents are of a type which the Hong
     Kong courts enforce. It does not mean that these obligations will
     necessarily be enforced in all circumstances in accordance with their
     terms. In particular:

     (i)   enforcement may be limited by general principles of equity, and in
           particular the remedies of injunction and specific performance are
           discretionary and will not be normally ordered by the court in
           respect of an obligation where damages would be an adequate remedy;

     (ii)  enforcement may be limited by laws from time to time in effect
           relating to insolvency, bankruptcy, liquidation, receivership,
           re-organisation, moratoria, court schemes or other similar laws
           affecting generally the enforcement of creditors rights;




     (iii) claims may be time-barred or become subject to defences of set-off or
           counterclaim;

     (iv)  upon a future application by any party to enforce any of the
           Transaction Documents, a Hong Kong court may consider the then
           prevailing public policy of Hong Kong in determining the
           enforceability of such Transaction Documents at such time;

     (v)   where obligations are to be performed in a jurisdiction outside Hong
           Kong, they may not be enforceable in Hong Kong to the extent that
           performance would be illegal or contrary to public policy under that
           jurisdiction; and

     (vi)  the enforceability of the Transaction Documents may be limited by the
           provisions of Hong Kong law applicable to contracts held to have been
           frustrated by events happening after their execution.

     Moreover, for the purposes of our opinions in paragraphs D(f) above, the
     term "binding" is used in the context of a theoretical future action or
     proceeding and, in such context, has a meaning similar to "enforceable" and
     accordingly our above qualifications as to the term "enforceable" also
     apply to the term "binding" as used in the said opinions.

(d)  Under subsection 6(6) of the Business Registration Ordinance (Cap. 310),
     the issue of a business registration certificate in respect of any business
     does not deem to imply that the requirements in any law in relation to such
     business or to persons carrying on the same or employed therein have been
     complied with.

(e)  The term "to the best of our knowledge" as used in these opinions means
     that we have not made any investigation or enquiry on the subject matter
     and that "knowledge" means only actual knowledge and not otherwise.

(f)  The effectiveness of terms exculpating a party from a liability or duty
     otherwise owed are limited by law.

(g)  Failure to exercise a right may operate as a waiver of that right
     notwithstanding any "no waiver" provisions contained in any of the
     Transaction Documents and a court will determine in its discretion whether
     or not an illegal, invalid or unenforceable provision may be severed
     notwithstanding any "severability" provisions contained in any of the
     Transaction Documents.

(h)  The freedom of parties to choose the governing law of a contract is subject
     to the following limitations:

     (i)   the choice of law must be legal, bona fide and must bear some
           objective relation to the contract and must not be contrary to public
           policy;

     (ii)  when the parties choose the laws of a jurisdiction to evade the
           application of a legal system with which the contract is objectively
           connected, the choice of law may be disregarded; and





     (iii) claims based on tort (e.g. fraud), as opposed to contract, will be
           governed by the law of the place where the tort was committed, rather
           than by the law of the place designated in the contract.

(i)  The courts in Hong Kong may stay proceedings if current proceedings are
     being brought elsewhere.

(j)  We express no opinion on the enforcement in Hong Kong of any judgment
     obtained against the Company in the PRC or any other jurisdiction outside
     Hong Kong.

(k)  To the extent that interest may be charged under the Transaction Documents,
     enforcement may be limited if the effective rate of interest charged is
     usurious or if the transaction is considered extortionate under the Money
     Lenders Ordinance (Cap.163 of the laws of Hong Kong).

(l)  On July 1, 1997, Hong Kong became the Hong Kong Special Administrative
     Region of the PRC. On April 4, 1990, the National People's Congress (the
     "NPC") of the PRC adopted the Basic Law of Hong Kong (the "Basic Law").
     Under Article 8 of the Basic Law, the laws of Hong Kong in force at June
     30, 1997 (including the common law, rules of equity, ordinances,
     subordinate legislation and customary law) shall be maintained, except for
     any that contravene the Basic Law and subject to any amendment by the
     legislature of Hong Kong. Under Article 160 of the Basic Law, the laws of
     Hong Kong in force at June 30, 1997 shall be adopted as laws of Hong Kong
     unless they are declared by the Standing Committee of the NPC (the
     "Standing Committee") to be in contravention of the Basic Law, and if any
     such laws are later discovered to be in contravention of the Basic Law,
     they shall be amended or cease to have force in accordance with the
     procedure prescribed by the Basic Law.

(m)  On February 23, 1997, the Standing Committee adopted a decision (the
     "Decision") on the treatment of laws previously in force in Hong Kong.
     Under paragraph 1 of the Decision, the Standing Committee decided that the
     laws previously in force in Hong Kong which include the common law, rules
     of equity, ordinances, subsidiary legislation and customary law, except for
     those which contravene the Basic Law are to be adopted as the laws of Hong
     Kong. Under paragraph 2 of the Decision, the Standing Committee decided
     that the ordinances and subsidiary legislation set out in Annex 1 to the
     Decision which are in contravention of the Basic Law are not to be adopted
     as the laws of Hong Kong. One of the ordinances set out in that Annex is
     the Application of English Law Ordinance (Cap.88) (the "English Law
     Ordinance"). The English Law Ordinance applied the common law and rules of
     equity of England to Hong Kong. We have assumed in giving these opinions
     that the effect of paragraph 2 of the Decision, insofar as it relates to
     the English Law Ordinance, is to repeal the English Law Ordinance
     prospectively and that the common law and rules of equity of England which
     applied in Hong Kong on June 30, 1997, continue to apply, subject to their
     subsequent independent development which will rest primarily with the
     courts of Hong Kong which are empowered by the Basic Law to refer to
     precedents of other common law jurisdictions when adjudicating cases. Such
     assumption is consistent with the approach taken by the Court of Appeal of
     Hong Kong in HKSAR v. Ma Wai-Kwan and others on 29 July 1997.

These opinions are strictly limited to the matters stated herein and no
inference or conclusion to the contrary should be drawn by any person or entity
to whom these opinions are given or





revealed whether as permitted herein or otherwise and these opinions may not be
disclosed to or relied upon by any person or entity except the addressees
hereof.



Yours faithfully,
BOUGHTON PETERSON YANG ANDERSON




                                   Exhibit "A"

                          (a) The Transaction Documents


II.  A. IN RESPECT OF BEIJING CHENHAO XINYE AIR TICKET SERVICE CO. LTD


     1.   Loan Agreement (in Chinese) dated 10 September 2003 between Ctrip.com
          (Hong Kong) Limited and Min Fan;

     2.   Exclusive Option Agreement (in Chinese) dated 10 September 2003
          between Ctrip.com (Hong Kong) Limited and Min Fan;

     3.   Loan Agreement (in Chinese) dated 10 September 2003 between Ctrip.com
          (Hong Kong) Limited and Qi Ji;

     4.   Exclusive Option Agreement (in Chinese) dated 10 September 2003
          between Ctrip.com (Hong Kong) Limited and Qi Ji;


     A.   B. In respect of Guangzhou Guangcheng Commercial Service Co. Ltd

     5.   Loan Agreement (in Chinese) dated 10 September 2003 between Ctrip.com
          (Hong Kong) Limited and Min Fan;

     6.   Exclusive Option Agreement (in Chinese) dated 10 September 2003
          between Ctrip.com (Hong Kong) Limited and Min Fan;

     7.   Loan Agreement (in Chinese) dated 10 September 2003 between Ctrip.com
          (Hong Kong) Limited and Alex Nanyan Zheng;

     8.   Exclusive Option Agreement (in Chinese) dated 10 September 2003
          between Ctrip.com (Hong Kong) Limited and Alex Nanyan Zheng;




     C.   IN RESPECT OF SHANGHAI CTRIP COMMERCE CO. LTD

     9.   Loan Agreement (in Chinese) dated 10 September 2003 between Ctrip.com
          (Hong Kong) Limited, Min Fan, Qi Ji

     10.  Exclusive Option Agreement (in Chinese) dated 10 September 2003
          between Ctrip.com (Hong Kong) Limited and Min Fan; and

     11.  Exclusive Option Agreement (in Chinese) dated 10 September 2003
          between Ctrip.com (Hong Kong) Limited and Qi Ji.




                                   Exhibit "B"

                ENGLISH TRANSLATION OF THE TRANSACTION DOCUMENTS


1.   Sample Loan Agreement dated 10 September 2003 between Ctrip.com (Hong Kong)
     Limited and certain other parties; and

2.   Sample Exclusive Option Agreement dated 10 September 2003 between Ctrip.com
     (Hong Kong) Limited and certain other parties.




                                   Exhibit "C"

Boughton Peterson Yang Anderson, in association with Squire, Sanders and
Dempsey, has further advised us that enforcement of a foreign judgment in Hong
Kong is subject to the Foreign Judgments (Reciprocal Enforcement) Ordinance
(Cap. 319) of the laws of Hong Kong (the "Ordinance") which provides that a
final and conclusive judgment of a court specified in an order under the
Ordinance against a Hong Kong company for a fixed sum of money and which is
enforceable by execution in the specified foreign jurisdiction (other than a sum
payable in respect of taxes or like charges, fines or penalties, in respect of
any legal proceedings) may be registered in Hong Kong in accordance with the
Rules of the High Court of Hong Kong and the provisions of the Ordinance and
upon registration would be enforceable in Hong Kong provided it is not
subsequently set aside by the courts of Hong Kong. The United States is not a
country specified in the orders passed under the Ordinance and therefore any
judgment granted by a United States Court would be enforceable in Hong Kong only
if it is made the subject of a Hong Kong judgment. A final judgment from a court
in the United States may be treated and be sued upon in the courts of Hong Kong
as a liquidated sum.